,TESTBANK FOR Business Law Text and Cases 16th
Edition by Kenneth W. Clarkson
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
True / False
1. Law consists of enforceable rules governing relationships among individuals and between individuals
and their society.
a. True
b. False
ANSWER: True
2. Because laws may change, the ability to analyze and evaluate the legal ramifications of situations as
they arise is a lasting skill.
a. True
b. False
ANSWER: True
3. The study of business law involves an ethical dimension.
a. True
b. False
ANSWER: True
4. 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
5. A constitution is a primary source of law.
a. True
b. False
ANSWER: True
6. A legal encyclopedia is a secondary source of law.
a. True
b. False
ANSWER: True
7. A secondary source of law establishes the law on a particular issue.
a. True
b. False
ANSWER: False
8. Courts often refer to secondary sources of law for guidance in interpreting and applying a primary
source of law.
a. True
b. False
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
ANSWER: True
9. Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that state’s
borders.
a. True
b. False
ANSWER: False
10. The U.S. Constitution is the basis of all law in the United States.
a. True
b. False
ANSWER: True
11. A state legislature has the option of adopting or rejecting a uniform law.
a. True
b. False
ANSWER: True
12. A local ordinance commonly has to do with a matter concerning only a local governing unit.
a. True
b. False
ANSWER: True
13. A federal statute applies only to those states that agree to apply it within their borders.
a. True
b. False
ANSWER: False
14. Congress or a state legislature establishes an administrative agency to perform a specific function.
a. True
b. False
ANSWER: True
15. Independent regulatory agencies are subject to the authority of the president.
a. True
b. False
ANSWER: True
16. Rules issued by administrative agencies affect almost every aspect of a business’s operations.
a. True
b. False
ANSWER: True
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
17. Federal agency regulations take precedence over conflicting state regulations.
a. True
b. False
ANSWER: True
18. Administrative law plays a relatively insignificant role in the regulatory environment of business.
a. True
b. False
ANSWER: False
19. The doctrines and principles announced in court decisions govern all areas not covered by statutory or
administrative law.
a. True
b. False
ANSWER: True
20. A court should overturn its precedents only when there is a compelling reason to do so.
a. True
b. False
ANSWER: True
21. Controlling precedents are binding authorities.
a. True
b. False
ANSWER: True
22. 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
23. Often, more than one rule of law will be applicable to a case.
a. True
b. False
ANSWER: True
24. There is one right answer to every legal question.
a. True
b. False
ANSWER: False
25. Because courts of law and equity have merged, the principles of equity are no longer applied.
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
a. True
b. False
ANSWER: False
26. With respect to the study of jurisprudence, there is essentially one school of legal thought.
a. True
b. False
ANSWER: False
27. Civil law has to do with wrongs committed against society for which society demands redress.
a. True
b. False
ANSWER: False
28. Frequently, people use the term cyberlaw to refer to the emerging body of law that governs
transactions conducted via the internet.
a. True
b. False
ANSWER: True
29. In a criminal case, the object is to protect an individual.
a. True
b. False
ANSWER: False
30. Courts will not grant an equitable remedy unless the remedy at law is adequate.
a. True
b. False
ANSWER: False
31. The basis of a civil law system is a written code of laws.
a. True
b. False
ANSWER: True
32. The remedies granted by the equity courts became known as remedies in equity, or equitable
remedies, and these remedies include monetary damages, injunction, and rescission.
a. True
b. False
ANSWER: False
33. Under the doctrine of stare decisis, judges are obligated to follow the precedents established within all
jurisdictions.
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
a. True
b. False
ANSWER: False
34. In the case citation, Badawi v. Albin, 311 Neb. 603, 973 N.W.2d 714 (2022), the opinion for this case
can be found in Volume 311 of the Nebraska Reports on page 603, and the parallel citation is to Volume
973 of the North Western Reporter, Second Series, on page 714.
a. True
b. False
ANSWER: True
35. A trial court case was appealed, and the appellate case was called Smith v. Williams, which indicates
that Smith was the plaintiff in the case at trial and Williams was the defendant.
a. True
b. False
ANSWER: False
Multiple Choice
36. Ramona is the CEO of Artistic Options. Ramona has an employee, Robin, who is arriving at work
late and leaving early. Ramona decides to fire Robin. While making this decision, it is beneficial to
Ramona to
a. allow Robin to resign instead of being fired.
b. give Robin multiple warnings before the termination notice.
c. not sign the letter of termination as CEO.
d. be familiar with the law including any laws regarding wrongful termination.
ANSWER: d
37. Primary sources of law include
a. legal encyclopedias.
b. official comments to statutes.
c. case law.
d. legal treatises.
ANSWER: c
38. Secondary sources of law include
a. state constitutions.
b. legal scholars’ research.
c. laws passed by local governing bodies.
d. regulations created by administrative agencies.
ANSWER: b
39. A constitution sets forth a government’s
a. limits but not powers.
b. limits and powers.
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
c. neither limits nor powers.
d. powers but not limits.
ANSWER: b
40. The basis of all law in the United States is
a. the U.S. Constitution.
b. laws passed by Congress.
c. case law.
d. regulations created by administrative agencies.
ANSWER: a
41. Laws enacted by legislative bodies at any level of government make up the body of law generally
referred to as
a. statutory law.
b. the basis of all law in the United States.
c. the supreme law of the land.
d. uniform law.
ANSWER: a
42. On a challenge to a provision in a state constitution that conflicts with a provision in the U.S.
Constitution
a. neither provision will be enforced.
b. both provisions will be enforced.
c. the state provision will be enforced only within that state’s borders.
d. the state provision will not be enforced.
ANSWER: d
43. The Florida legislature enacts a state law that violates the U.S. Constitution. This law can be enforced
by
a. no one.
b. the federal government only.
c. the state of Florida only.
d. the U.S. Supreme Court only.
ANSWER: a
44. The Uniform Commercial Code facilitates commerce
a. among the states.
b. between the states and the federal government.
c. in countries that were once colonies of Great Britain.
d. in international markets.
ANSWER: a
45. The Uniform Commercial Code facilitates commerce among the states by providing
a. a uniform, yet flexible, set of rules governing commercial transactions.
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,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
b. a process for companies to sue each other in the case of a dispute.
c. an option for commerce to be conducted solely online.
d. that all commercial transactions occur between the states, not solely within one state.
ANSWER: a
46. Administrative law includes
a. all laws that affect business operations.
b. the rules, orders, and decisions of a government agency.
c. model laws developed by the National Conference of Commissioners on Uniform State Laws.
d. laws enacted by a legislative body.
ANSWER: b
47. Regulations issued by a state or local agency may affect all of the following aspects of a business’s
operations except
a. capital structure and financing.
b. product manufacturing and marketing.
c. relations with employees and unions.
d. compliance with conflicting federal agency regulations.
ANSWER: d
48. The Food and Drug Administration (FDA) is an executive agency. As an executive agency, the FDA
is subject to the authority of
a. no government official or entity.
b. the president.
c. state legislatures.
d. the U.S. Attorney General.
ANSWER: b
49. Common law rules develop from
a. principles underlying judges’ decisions in actual controversies.
b. regulations issued by administrative agencies.
c. statutes enacted by Congress and the state legislatures.
d. uniform laws drafted by legal scholars.
ANSWER: a
50. Stare decisis is best defined as
a. a doctrine under which judges follow established precedents.
b. the authority to decide a specific dispute.
c. a judicial proceeding to redress a wrong.
d. a situation giving a person a right to initiate a judicial proceeding.
ANSWER: a
51. A precedent is
a. the chief executive officer of the United States.
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, Name: Class: Date:
Chapter 01 Law and Legal Reasoning
b. a court decision that furnishes an example for deciding subsequent cases involving similar or
identical facts or principles.
c. a lawsuit in which a number of persons join together.
d. the fundamental procedure by which the government exercises its authority.
ANSWER: b
52. Each court has a jurisdiction. Jurisdiction is best defined as
a. a doctrine that follows established precedents.
b. the geographic area in which a court has the power to apply the law.
c. a judicial proceeding to redress a wrong.
d. a situation giving a person a right to initiate a judicial proceeding.
ANSWER: b
53. Once a court has applied a principle to a certain set of facts, that principle must be applied in future
cases involving
a. different facts.
b. similar facts.
c. any facts.
d. no particular facts.
ANSWER: b
54. In deciding a case of first impression, appropriate sources for a court to consider include all of the
following except
a. legal authorities that are not binding on the court.
b. issues of fairness.
c. government policy based on widely held social values.
d. a poll of those present in the courtroom at the time of the decision.
ANSWER: d
55. In Peyton v. Quality Motors, a state supreme court held that a minor could cancel a contract for the
sale of a car. Now a trial court in the same state is deciding Rikki v. Street Deals, Inc., a case with similar
facts. Under the doctrine of stare decisis, the trial court is likely to
a. allow the minor to cancel the contract.
b. disregard the Peyton case.
c. order the minor to cancel the contract.
d. require the minor to fulfill the contract.
ANSWER: a
56. In the case of Sales Corp. v. Transport Co., the court may rule contrary to a precedent if the court
decides that the precedent
a. is incorrect or inapplicable.
b. is not in line with the judge’s personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers.
Copyright Cengage Learning. Powered by Cognero. Page 8
Edition by Kenneth W. Clarkson
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
True / False
1. Law consists of enforceable rules governing relationships among individuals and between individuals
and their society.
a. True
b. False
ANSWER: True
2. Because laws may change, the ability to analyze and evaluate the legal ramifications of situations as
they arise is a lasting skill.
a. True
b. False
ANSWER: True
3. The study of business law involves an ethical dimension.
a. True
b. False
ANSWER: True
4. 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
5. A constitution is a primary source of law.
a. True
b. False
ANSWER: True
6. A legal encyclopedia is a secondary source of law.
a. True
b. False
ANSWER: True
7. A secondary source of law establishes the law on a particular issue.
a. True
b. False
ANSWER: False
8. Courts often refer to secondary sources of law for guidance in interpreting and applying a primary
source of law.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
ANSWER: True
9. Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that state’s
borders.
a. True
b. False
ANSWER: False
10. The U.S. Constitution is the basis of all law in the United States.
a. True
b. False
ANSWER: True
11. A state legislature has the option of adopting or rejecting a uniform law.
a. True
b. False
ANSWER: True
12. A local ordinance commonly has to do with a matter concerning only a local governing unit.
a. True
b. False
ANSWER: True
13. A federal statute applies only to those states that agree to apply it within their borders.
a. True
b. False
ANSWER: False
14. Congress or a state legislature establishes an administrative agency to perform a specific function.
a. True
b. False
ANSWER: True
15. Independent regulatory agencies are subject to the authority of the president.
a. True
b. False
ANSWER: True
16. Rules issued by administrative agencies affect almost every aspect of a business’s operations.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
17. Federal agency regulations take precedence over conflicting state regulations.
a. True
b. False
ANSWER: True
18. Administrative law plays a relatively insignificant role in the regulatory environment of business.
a. True
b. False
ANSWER: False
19. The doctrines and principles announced in court decisions govern all areas not covered by statutory or
administrative law.
a. True
b. False
ANSWER: True
20. A court should overturn its precedents only when there is a compelling reason to do so.
a. True
b. False
ANSWER: True
21. Controlling precedents are binding authorities.
a. True
b. False
ANSWER: True
22. 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
23. Often, more than one rule of law will be applicable to a case.
a. True
b. False
ANSWER: True
24. There is one right answer to every legal question.
a. True
b. False
ANSWER: False
25. Because courts of law and equity have merged, the principles of equity are no longer applied.
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
a. True
b. False
ANSWER: False
26. With respect to the study of jurisprudence, there is essentially one school of legal thought.
a. True
b. False
ANSWER: False
27. Civil law has to do with wrongs committed against society for which society demands redress.
a. True
b. False
ANSWER: False
28. Frequently, people use the term cyberlaw to refer to the emerging body of law that governs
transactions conducted via the internet.
a. True
b. False
ANSWER: True
29. In a criminal case, the object is to protect an individual.
a. True
b. False
ANSWER: False
30. Courts will not grant an equitable remedy unless the remedy at law is adequate.
a. True
b. False
ANSWER: False
31. The basis of a civil law system is a written code of laws.
a. True
b. False
ANSWER: True
32. The remedies granted by the equity courts became known as remedies in equity, or equitable
remedies, and these remedies include monetary damages, injunction, and rescission.
a. True
b. False
ANSWER: False
33. Under the doctrine of stare decisis, judges are obligated to follow the precedents established within all
jurisdictions.
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
a. True
b. False
ANSWER: False
34. In the case citation, Badawi v. Albin, 311 Neb. 603, 973 N.W.2d 714 (2022), the opinion for this case
can be found in Volume 311 of the Nebraska Reports on page 603, and the parallel citation is to Volume
973 of the North Western Reporter, Second Series, on page 714.
a. True
b. False
ANSWER: True
35. A trial court case was appealed, and the appellate case was called Smith v. Williams, which indicates
that Smith was the plaintiff in the case at trial and Williams was the defendant.
a. True
b. False
ANSWER: False
Multiple Choice
36. Ramona is the CEO of Artistic Options. Ramona has an employee, Robin, who is arriving at work
late and leaving early. Ramona decides to fire Robin. While making this decision, it is beneficial to
Ramona to
a. allow Robin to resign instead of being fired.
b. give Robin multiple warnings before the termination notice.
c. not sign the letter of termination as CEO.
d. be familiar with the law including any laws regarding wrongful termination.
ANSWER: d
37. Primary sources of law include
a. legal encyclopedias.
b. official comments to statutes.
c. case law.
d. legal treatises.
ANSWER: c
38. Secondary sources of law include
a. state constitutions.
b. legal scholars’ research.
c. laws passed by local governing bodies.
d. regulations created by administrative agencies.
ANSWER: b
39. A constitution sets forth a government’s
a. limits but not powers.
b. limits and powers.
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
c. neither limits nor powers.
d. powers but not limits.
ANSWER: b
40. The basis of all law in the United States is
a. the U.S. Constitution.
b. laws passed by Congress.
c. case law.
d. regulations created by administrative agencies.
ANSWER: a
41. Laws enacted by legislative bodies at any level of government make up the body of law generally
referred to as
a. statutory law.
b. the basis of all law in the United States.
c. the supreme law of the land.
d. uniform law.
ANSWER: a
42. On a challenge to a provision in a state constitution that conflicts with a provision in the U.S.
Constitution
a. neither provision will be enforced.
b. both provisions will be enforced.
c. the state provision will be enforced only within that state’s borders.
d. the state provision will not be enforced.
ANSWER: d
43. The Florida legislature enacts a state law that violates the U.S. Constitution. This law can be enforced
by
a. no one.
b. the federal government only.
c. the state of Florida only.
d. the U.S. Supreme Court only.
ANSWER: a
44. The Uniform Commercial Code facilitates commerce
a. among the states.
b. between the states and the federal government.
c. in countries that were once colonies of Great Britain.
d. in international markets.
ANSWER: a
45. The Uniform Commercial Code facilitates commerce among the states by providing
a. a uniform, yet flexible, set of rules governing commercial transactions.
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 01 Law and Legal Reasoning
b. a process for companies to sue each other in the case of a dispute.
c. an option for commerce to be conducted solely online.
d. that all commercial transactions occur between the states, not solely within one state.
ANSWER: a
46. Administrative law includes
a. all laws that affect business operations.
b. the rules, orders, and decisions of a government agency.
c. model laws developed by the National Conference of Commissioners on Uniform State Laws.
d. laws enacted by a legislative body.
ANSWER: b
47. Regulations issued by a state or local agency may affect all of the following aspects of a business’s
operations except
a. capital structure and financing.
b. product manufacturing and marketing.
c. relations with employees and unions.
d. compliance with conflicting federal agency regulations.
ANSWER: d
48. The Food and Drug Administration (FDA) is an executive agency. As an executive agency, the FDA
is subject to the authority of
a. no government official or entity.
b. the president.
c. state legislatures.
d. the U.S. Attorney General.
ANSWER: b
49. Common law rules develop from
a. principles underlying judges’ decisions in actual controversies.
b. regulations issued by administrative agencies.
c. statutes enacted by Congress and the state legislatures.
d. uniform laws drafted by legal scholars.
ANSWER: a
50. Stare decisis is best defined as
a. a doctrine under which judges follow established precedents.
b. the authority to decide a specific dispute.
c. a judicial proceeding to redress a wrong.
d. a situation giving a person a right to initiate a judicial proceeding.
ANSWER: a
51. A precedent is
a. the chief executive officer of the United States.
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, Name: Class: Date:
Chapter 01 Law and Legal Reasoning
b. a court decision that furnishes an example for deciding subsequent cases involving similar or
identical facts or principles.
c. a lawsuit in which a number of persons join together.
d. the fundamental procedure by which the government exercises its authority.
ANSWER: b
52. Each court has a jurisdiction. Jurisdiction is best defined as
a. a doctrine that follows established precedents.
b. the geographic area in which a court has the power to apply the law.
c. a judicial proceeding to redress a wrong.
d. a situation giving a person a right to initiate a judicial proceeding.
ANSWER: b
53. Once a court has applied a principle to a certain set of facts, that principle must be applied in future
cases involving
a. different facts.
b. similar facts.
c. any facts.
d. no particular facts.
ANSWER: b
54. In deciding a case of first impression, appropriate sources for a court to consider include all of the
following except
a. legal authorities that are not binding on the court.
b. issues of fairness.
c. government policy based on widely held social values.
d. a poll of those present in the courtroom at the time of the decision.
ANSWER: d
55. In Peyton v. Quality Motors, a state supreme court held that a minor could cancel a contract for the
sale of a car. Now a trial court in the same state is deciding Rikki v. Street Deals, Inc., a case with similar
facts. Under the doctrine of stare decisis, the trial court is likely to
a. allow the minor to cancel the contract.
b. disregard the Peyton case.
c. order the minor to cancel the contract.
d. require the minor to fulfill the contract.
ANSWER: a
56. In the case of Sales Corp. v. Transport Co., the court may rule contrary to a precedent if the court
decides that the precedent
a. is incorrect or inapplicable.
b. is not in line with the judge’s personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers.
Copyright Cengage Learning. Powered by Cognero. Page 8
