Test Bank for The Legal Environment of Business 11th Edition Cross / All Chapters 1 – 28 / Full Complete 2023

Ch01: Law and Legal Reasoning
Page 1
The Legal Environment of Business 11th Edition Cross
Test Bank
True / False

1. In the United States, the law consists of written laws and court decisions.
   a. True
   b. False
   ANSWER: True
2. The legal rules that control a business’s actions reflect past and current thinking about how similar businesses should
   and should not act.
   a. True
   b. False
   ANSWER: True
3. Because laws may change, the ability to analyze and evaluate the legal ramifications of situations as they arise is not
   a lasting skill.
   a. True
   b. False
   ANSWER: False
4. The study of business law does not involve an ethical dimension.
   a. True
   b. False
   ANSWER: False
5. Compartmentalizing the law into discrete topics indicates that each business transaction is subject to only one specific
   area of the law.
   a. True
   b. False
   ANSWER: False
6. A constitution is a primary source of law.
   a. True
   b. False
   ANSWER: True
7. A statute is a secondary source of law.
   a. True
   b. False
   ANSWER: False

Ch01: Law and Legal Reasoning
Page 2

8. A secondary source of law establishes the law on a particular issue.
   a. True
   b. False
   ANSWER: False
9. Courts often refer to secondary sources of law for guidance in interpreting and applying a primary source of law.
   a. True
   b. False
   ANSWER: True
10. Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that states’ borders.
    a. True
    b. False
    ANSWER: False
11. The U.S. Constitution is the basis of all law in the United States.
    a. True
    b. False
    ANSWER: True
12. Only if a state legislature adopts a uniform law does that law become part of the statutory law of that state.
    a. True
    b. False
    ANSWER: True
13. A citation is a regulation enacted by a city or county legislative body.
    a. True
    b. False
    ANSWER: False
14. A local ordinance commonly has to do with a matter concerning only a local governing unit.
    a. True
    b. False
    ANSWER: True
15. A federal statute applies only to those states that agree to apply it within their borders.
    a. True
    b. False
    ANSWER: False

Name: Class: Date:
Ch01: Law and Legal Reasoning
Page 3

16. Congress or a state legislature establishes an administrative agency to perform a specific function.
    a. True
    b. False
    ANSWER: True
17. Independent regulatory agencies are not subject to the authority of the president.
    a. True
    b. False
    ANSWER: False
18. Rules issued by administrative agencies affect almost every aspect of a business’s operations.
    a. True
    b. False
    ANSWER: True
19. Federal agency regulations do not take precedence over conflicting state regulations.
    a. True
    b. False
    ANSWER: False
20. Administrative law plays a relatively insignificant role in the regulatory environment of business.
    a. True
    b. False
    ANSWER: False
21. The doctrines and principles announced in court decisions govern all areas not covered by statutory or administrative
    law.
    a. True
    b. False
    ANSWER: True
22. The common law is a body of law developed from judicial decisions.
    a. True
    b. False
    ANSWER: True
23. A court should overturn its precedents unless there is a compelling reason not to.
    a. True
    b. False
    ANSWER: False

Name: Class: Date:
Ch01: Law and Legal Reasoning

24. Controlling precedents are binding authorities.
    a. True
    b. False
    Page 4
    ANSWER: True
25. A case of first impression is any legal authority or source of law that a court may look to for guidance but need not
    follow when making its decision.
    a. True
    b. False
    ANSWER: False
26. Often, more than one rule of law will be applicable to a case.
    a. True
    b. False
    ANSWER: True
27. There is one right answer to every legal question.
    a. True
    b. False
    ANSWER: False
28. Because courts of law and equity have merged, the principles of equity are no longer applied.
    a. True
    b. False
    ANSWER: False
29. With respect to the study of jurisprudence, there is only one school of legal thought.
    a. True
    b. False
    ANSWER: False
30. Civil law has to do with wrongs committed against society for which society demands redress.
    a. True
    b. False
    ANSWER: False
31. International law derivesfrom a variety ofsources, including the laws of individual nations.
    a. True
    b. False
    ANSWER: True