BUS 206 EXAM 1 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Which is generally recognized as the best (most correct) definition of law?
a. a body of rules of action or conduct prescribed by controlling authority, and having binding legal
force
b. that which must be obeyed and followed by members of a society subject to sanctions or legal
consequences
c. the circumstances in which the public force is brought to bear through the courts
d. a rule of conduct that justifies a prediction that it likely will be enforced by the courts if its authority
is challenged
e. all of the other choices are correct; there is no one agreed upon best definition - Answers E
By the use of laws and the legal system, the government can:
a. change acceptable behavior
b. instruct people on what is allowed in certain circumstances
c. encourage certain types of business activity
d. impose sanctions to try to eliminate certain business activities
e. all of the other choices are included - Answers E
Law may be viewed as a collection of rules or principles intended to prescribe and control human
behavior. T or F? - Answers True
Which of the following is NOT generally considered to be a part of the rules that govern behavior in
most nations:
a. ethics
b. psychology
c. social customs
d. administrative rules
e. all of the other choices are NOT parts of the rules - Answers B
Social change occurs naturally and never involves the use of laws or the legal system. T or F - Answers
False
The United States Constitution:
a. is the oldest written constitution except for those in England (U.K.) and Spain
b. created the three branches of government
c. established the common law
d. created the cabinet officers (Secretary of State, Secretary of Defense, etc.)
e. all of the other choices are correct - Answers B
A constitution is fundamental law which establishes the powers of the government and the limits of
that power. T or F - Answers False
Powers not granted to the federal government are retained by states or are left to the people
according to:
a. the Constitution
b. The Supreme Court
c. the common law
d. Executive Order 153
e. none of the other choices are correct - Answers A
The Constitution specifically creates the executive, legislative, and administrative branches of the
federal government. T or F? - Answers False
State constitutions, unlike the federal Constitution, tend to be very short and have few details. T or F?
- Answers False
Statutory law is:
a. a rule declared by the Supreme Court
,b. also known as the fundamental law of the nation
c. a form of common law
d. the separation of powers at the federal level
e. none of the other choices are correct - Answers E
The U.S. Constitution created these branches of the federal government: (1) executive, (2) judicial,
and (3):
a. senatorial
b. administrative
c. constitutional
d. states
e. none of the other choices are correct - Answers E
State constitutions:
a. must be approved by a two-thirds vote of Congress
b. are the highest form of law within each state
c. tend to be much shorter than the U.S. Constitution
d. must be approved by state supreme courts
e. none of the other choices are correct - Answers E
The powers and structures of all state governments are based on:
a. unwritten constitutions
b. written constitutions
c. unwritten agreements between the state residents and their congressional representatives
d. written agreements between the state residents and their congressional representatives
e. the Bill of Rights - Answers B
State constitutions tend to be longer and more detail-filled than the U.S. Constitution in part because:
a. state constitutions are more important
b. individual states have different moral codes
c. there is no separation of power at the state level
d. all of the other specific choices are correct
e. none of the other specific choices is correct - Answers E
An important source of U.S. law affecting the legal environment of business are regulations, opinions,
and orders from:
a. administrative agencies
b. police department policies
c. U.S. Senate resolutions
d. U.N. treaties
e. executive (Presidential) charters - Answers A
The judiciary:
a. applies the common law
b. writes laws
c. is not involved with the common law
d. is controlled by voters through referendums
e. none of the other choices - Answers A
A key function of the judiciary is to interpret and enforce the laws. T or F - Answers True
The term "common law" refers to:
a. law common to most countries
b. laws passed by Congress
c. law made and applied by judges
d. law passed by a state's legislature
e. none of the other choices are correct - Answers C
, When judges use decisions from earlier legal cases for guidance in legal principles to solve current
cases it is referred to as:
a. Common Law
b. Precedent
c. Procedural Law
d. Statutory Procedure
e. Legal Culture - Answers B
The doctrine of stare decisis can be defined as:
a. the use of prior case decisions as guidance in resolving later disputes
b. laws setting forth rules for relationships between people
c. a private or civil wrong that results in injury to another
d. decisions concerning legal wrongs or crimes committed against society
e. none of the other choices are correct - Answers A
The doctrine of stare decisis in the common law means that decisions from past cases must always be
followed so that common law rules will not change. T or F? - Answers False
A problem with the doctrine of stare decisis in common law is that judges are forced to stand by old
rules, even if they no longer seem appropriate. T or F? - Answers False
A major advantages of the use of precedent in law for businesses is that they will:
a. be able to get judges to resolve cases in favor of large businesses
b. be able to avoid harsh punishments from the use of ineffective attorneys
c. be unable to plan for future contingencies
d. be unable to enforce contracts
e. have reasonable expectations about the enforcement of agreements - Answers E
In Davis v. Baugh Industrial Contractors, the traditional common law rule prevented a party who
accepted a completed construction project from later suing the contractor for flaws in construction
that caused injury to others. In reviewing such a case, the Washington state high court held that the
rule was not sensible in modern times and would be dropped. This is an example of how:
a. modern day values are changing
b. common law can adapt to changing circumstances
c. common law never changes
d. courts can never go against a precedent set in previous cases
e. none of the other choices - Answers B
American firms doing business in other countries:
a. are not subject to any laws other than those of the United States
b. are subject to the laws of the country in which it does business
c. are only subject to the laws of the United States, unless the other country specifically says
otherwise
d. are subject to international laws, but not the laws of the country in which they operate
e. none of the other choices - Answers B
When operating in the international arena, American businesses must take into account:
a. U.S. federal laws
b. the laws of all countries in which they have operations
c. international treaties and trade agreements that may apply
d. the rules of the World Trade Organization
Which is generally recognized as the best (most correct) definition of law?
a. a body of rules of action or conduct prescribed by controlling authority, and having binding legal
force
b. that which must be obeyed and followed by members of a society subject to sanctions or legal
consequences
c. the circumstances in which the public force is brought to bear through the courts
d. a rule of conduct that justifies a prediction that it likely will be enforced by the courts if its authority
is challenged
e. all of the other choices are correct; there is no one agreed upon best definition - Answers E
By the use of laws and the legal system, the government can:
a. change acceptable behavior
b. instruct people on what is allowed in certain circumstances
c. encourage certain types of business activity
d. impose sanctions to try to eliminate certain business activities
e. all of the other choices are included - Answers E
Law may be viewed as a collection of rules or principles intended to prescribe and control human
behavior. T or F? - Answers True
Which of the following is NOT generally considered to be a part of the rules that govern behavior in
most nations:
a. ethics
b. psychology
c. social customs
d. administrative rules
e. all of the other choices are NOT parts of the rules - Answers B
Social change occurs naturally and never involves the use of laws or the legal system. T or F - Answers
False
The United States Constitution:
a. is the oldest written constitution except for those in England (U.K.) and Spain
b. created the three branches of government
c. established the common law
d. created the cabinet officers (Secretary of State, Secretary of Defense, etc.)
e. all of the other choices are correct - Answers B
A constitution is fundamental law which establishes the powers of the government and the limits of
that power. T or F - Answers False
Powers not granted to the federal government are retained by states or are left to the people
according to:
a. the Constitution
b. The Supreme Court
c. the common law
d. Executive Order 153
e. none of the other choices are correct - Answers A
The Constitution specifically creates the executive, legislative, and administrative branches of the
federal government. T or F? - Answers False
State constitutions, unlike the federal Constitution, tend to be very short and have few details. T or F?
- Answers False
Statutory law is:
a. a rule declared by the Supreme Court
,b. also known as the fundamental law of the nation
c. a form of common law
d. the separation of powers at the federal level
e. none of the other choices are correct - Answers E
The U.S. Constitution created these branches of the federal government: (1) executive, (2) judicial,
and (3):
a. senatorial
b. administrative
c. constitutional
d. states
e. none of the other choices are correct - Answers E
State constitutions:
a. must be approved by a two-thirds vote of Congress
b. are the highest form of law within each state
c. tend to be much shorter than the U.S. Constitution
d. must be approved by state supreme courts
e. none of the other choices are correct - Answers E
The powers and structures of all state governments are based on:
a. unwritten constitutions
b. written constitutions
c. unwritten agreements between the state residents and their congressional representatives
d. written agreements between the state residents and their congressional representatives
e. the Bill of Rights - Answers B
State constitutions tend to be longer and more detail-filled than the U.S. Constitution in part because:
a. state constitutions are more important
b. individual states have different moral codes
c. there is no separation of power at the state level
d. all of the other specific choices are correct
e. none of the other specific choices is correct - Answers E
An important source of U.S. law affecting the legal environment of business are regulations, opinions,
and orders from:
a. administrative agencies
b. police department policies
c. U.S. Senate resolutions
d. U.N. treaties
e. executive (Presidential) charters - Answers A
The judiciary:
a. applies the common law
b. writes laws
c. is not involved with the common law
d. is controlled by voters through referendums
e. none of the other choices - Answers A
A key function of the judiciary is to interpret and enforce the laws. T or F - Answers True
The term "common law" refers to:
a. law common to most countries
b. laws passed by Congress
c. law made and applied by judges
d. law passed by a state's legislature
e. none of the other choices are correct - Answers C
, When judges use decisions from earlier legal cases for guidance in legal principles to solve current
cases it is referred to as:
a. Common Law
b. Precedent
c. Procedural Law
d. Statutory Procedure
e. Legal Culture - Answers B
The doctrine of stare decisis can be defined as:
a. the use of prior case decisions as guidance in resolving later disputes
b. laws setting forth rules for relationships between people
c. a private or civil wrong that results in injury to another
d. decisions concerning legal wrongs or crimes committed against society
e. none of the other choices are correct - Answers A
The doctrine of stare decisis in the common law means that decisions from past cases must always be
followed so that common law rules will not change. T or F? - Answers False
A problem with the doctrine of stare decisis in common law is that judges are forced to stand by old
rules, even if they no longer seem appropriate. T or F? - Answers False
A major advantages of the use of precedent in law for businesses is that they will:
a. be able to get judges to resolve cases in favor of large businesses
b. be able to avoid harsh punishments from the use of ineffective attorneys
c. be unable to plan for future contingencies
d. be unable to enforce contracts
e. have reasonable expectations about the enforcement of agreements - Answers E
In Davis v. Baugh Industrial Contractors, the traditional common law rule prevented a party who
accepted a completed construction project from later suing the contractor for flaws in construction
that caused injury to others. In reviewing such a case, the Washington state high court held that the
rule was not sensible in modern times and would be dropped. This is an example of how:
a. modern day values are changing
b. common law can adapt to changing circumstances
c. common law never changes
d. courts can never go against a precedent set in previous cases
e. none of the other choices - Answers B
American firms doing business in other countries:
a. are not subject to any laws other than those of the United States
b. are subject to the laws of the country in which it does business
c. are only subject to the laws of the United States, unless the other country specifically says
otherwise
d. are subject to international laws, but not the laws of the country in which they operate
e. none of the other choices - Answers B
When operating in the international arena, American businesses must take into account:
a. U.S. federal laws
b. the laws of all countries in which they have operations
c. international treaties and trade agreements that may apply
d. the rules of the World Trade Organization
