The Legal Environment of Business, 8e (Kubasek)
Chapter 2 Introduction to Law and the Legal Environment of Business
1) The purpose of the North American Free Trade Agreement (NAFTA) is to ________.
A) codify international treaties with the countries that are part of the agreement
B) increase immigration quotas in the countries that are part of the agreement
C) lower trade barriers within the countries that are part of the agreement
D) defend coastal borders of the countries involved in trade, and are part of the agreement
2) The Asian-Pacific Economic Cooperation (APEC) forum is discussing the creation of an
economic free trade zone that would extend from ________.
A) Chile to China
B) the United States to China
C) China to Singapore
D) Japan to China
3) Which of the following is not a characteristic of the legal environment of business?
A) adherence to autocratic doctrine
B) critical thinking skills
C) an understanding that the law is dynamic
D) real-world problems
4) The study of the legal environment of business is characterized by ________ thinking skills.
A) autocratic
B) subjective
C) critical
D) doctrinal
5) The study of the legal environment of business includes an understanding that the law is
________, not ________.
A) state; federal
B) federal; state
C) dynamic; static
D) static; dynamic
6) A study by the Hearst Corporation found that ________ percent of Americans believe that it is
up to the criminally accused to prove their innocence, despite our common-law heritage that a
person is presumed innocent until proven guilty.
A) 10
B) 20
C) 50
D) 75
7) Which of the following statements is a feature of the study of the legal environment of
business?
A) It is designed to maximize enrollment at schools of law throughout the United States.
B) It develops an understanding that the law is dynamic, not static.
C) It encourages the search for the one true answer to each legal question.
D) It is based on the Platonic system of social control.
8) Which of the following is a feature of the study of the legal environment of business?
A) It is arbitrary and capricious.
B) It involves theoretical legal problems.
C) It excludes ethical considerations.
D) It is interdisciplinary.
9) The study of the legal environment includes the study of the administrative law process and
the role of businesspeople in that process.
10) The United States, Canada, and Mexico created the North American Free Trade Agreement
(NAFTA) to lower trade barriers among themselves.
11) An important function of the World Trade Organization is to lower trade barriers.
12) Since the pace of economic globalization has slowed in recent years, there is less reason to
be concerned about political and economic developments in other countries.
13) American law is not dynamic; rather, its precepts are “written in stone.”
14) According to the American jurist Oliver Wendell Holmes, law is grounded in theory rather
than experience.
15) List the five features of the legal environment of business.
16) ________ is the science or philosophy of ________, in its most generalized form.
A) Jurisprudence; law
B) Equity; law
C) Litigation; equity
D) Justice; litigation
17) Which of the following is not a recognized school of jurisprudence?
A) natural law
B) positivist
C) theological
D) sociological
18) Which of the following is not a recognized school of jurisprudence?
A) doctrinal
B) American realist
C) critical legal studies
D) feminist
19) Which of the following is not a recognized school of jurisprudence?
A) natural law
B) European enlightenment
C) law and economics
D) positivist
20) Which of the following is not a recognized school of jurisprudence?
A) sociological
B) American realist
C) pragmatist
D) critical legal studies
21) Which of the following schools of jurisprudence is characterized by the existence of values
that are unchanging because their source is absolute?
A) natural law
B) positivist
C) sociological
D) American realist
22) Which of the following is true of the natural law school of jurisprudence?
A) It has existed since 300 B.C. and bases law on certain unchanging value judgments.
B) It focuses on environmental concerns, such as toxic waste and air quality.
C) Its source of law is contemporary community opinion and customs.
D) It teaches that the legislature is the primary source of all law.
23) A natural law school teaches that ________.
A) good laws depend on good judges
B) law, ethics, and morality should remain separate
C) one has a moral responsibility to disobey an unjust law
D) the U. S. Constitution is the highest legal authority in the United States
24) Which of the following statements is an argument raised by critics of a natural law school?
A) It requires sophisticated quantitative methodology, relying too heavily upon statistical
methods.
B) It is based primarily upon the European rather than American legal thinking.
C) It is overly subjective in a nation of differing cultures and moral values.
D) It is designed for communist and socialist political systems.
25) Which of the following schools of jurisprudence states that the source of law is the
sovereign?
A) natural law school
B) positivist school
C) sociological school
D) American realist school
26) The positivist school of law states that ________.
A) certain legal values that are unchanging exist because their source is absolute
B) certain legal values that can be judged by human reason exist, and once determined, they
supersede any form of human law
C) law is a closed logical system in which correct legal decisions are reached solely by logic and
the use of precedents
D) a legislator or a judge can determine law by making an inventory of community interests
27) Juan, a lawyer, argues that morals have no say in determining legal decisions and extralegal
factors must be ignored by judges when determining violations of the law. Juan is an adherent of
the ________.
A) critical legal studies school of law
B) sociological school of law
C) American realist school of law
D) positivist school of law
28) Which of the following schools of law is criticized for creating a static jurisprudence because
it does not take into account social and ethical factors?
A) the sociological school
B) the American realist school
C) the positivist school
D) the natural law school
29) Which of the following arguments has been made by legal scholars when criticizing the
positivist school of law?
A) It is impossible to remain positive about everything when there is so much negativity in the
world.
B) The positivist school is irrational and not founded in logic.
C) The positivist school ignores the importance of precedence.
D) The positivist school adopts a view that is too narrow and literal-minded.
30) Which of the following schools of jurisprudence believes that the source of law is
contemporary community opinion and customs?
A) critical legal studies school
B) sociological school
C) American realist school
D) positivist school
31) The posted speed limit on the interstate near Omar’s house is 60 miles per hour, but no one
ever gets a ticket unless they drive over 70 miles per hour. One morning, Omar receives a ticket
for going 68 miles per hour. He is outraged and believes that a true injustice has occurred. Based
on the scenario, Omar adheres to the ________.
A) feminist school of law
B) sociological school of law
C) positivist school of law
D) natural law school
32) Which of the following is true of the sociological school of law?
A) It is parallel to the positivist school of law and shares the same chief tenets.
B) Adherents of the sociological school seek to change the law by surveying case precedents and
statutory law.
C) The sociological school requires a legislator or judge to make an inventory of community
interests.
D) This school of law is very predictable with regard to individuals and businesses.
33) Which of the following is a difference between the sociological school of law and the
positivist school of law?
A) The positivist school of law states that morals should not be considered in making legal
decisions, whereas the positivist school of law advocates the use of morals in making legal
decisions.
B) The source of law of the sociological school is the sovereign, whereas the source of law of the
positivist school is contemporary community opinion and customs.
C) The sociological school of law looks at actual human behavior and values, whereas the
positivist school of law insists that the focus should remain on statutes and precedents.
D) Adherents have criticized the sociological school of law for being too narrow and literal
minded, whereas the positivist school of law has been criticized for being too unpredictable.
34) Which of the following arguments has been made by critics of the sociological school of
law?
A) Sociology is not relevant to law, and so its views can be ignored.
B) The sociological school has proposed a view of law that is rigid and uncompromising.
C) The sociological school places too great an emphasis on quantitative data rather than
experienced gut reactions.
D) The sociological school makes the law unpredictable, since community standards change over
time.
35) The American realist school of law believes that ________.
A) the source of law is contemporary community opinion and customs
B) morals are separate from law and should not be considered in making legal decisions
C) classical economic theory and empirical methods must be applied to all areas of law in order
to arrive at decisions
D) the source of law is actors in the legal system and scientific analysis of their actions
36) Which of the following is true of the American realist school of law?
A) It sees law as part of society and a means of enforcing political and social values.
B) It says that judges and legislators should use an inventory of community interests to
familiarize themselves with the community’s standards and mores.
C) It believes that morality is important to determine whether discrimination exists when a
business pays workers differently on the basis of their sex, race, religion, or ethnic origin.
D) It is the same as the sociological school because it focuses on the larger community to
determine the meaning of law.
37) Which of the following would prove to be most helpful to a disciple of the American realist
school?
A) a scientific study of plea bargaining in the courtroom
B) a law passed to show the importance of morality in cases of discrimination
C) a quantitative analysis of statistical data about county government expenditures
D) a study of the community interests and standards
38) The ________ school of jurisprudence seeks to connect what happens in the legal system to
the political-economic context within which it operates.
A) sociological
B) critical legal studies
C) American realist
D) positivist
39) Proponents of the critical legal studies school of jurisprudence believe that ________.
A) morality is important to determine whether discrimination exists when a business pays
workers differently on the basis of their sex, race, religion, or ethnic origin
B) law is a mix of legal and non-legal beliefs that have been constructed by the community to
rationalize their way of life
C) law reflects a cluster of beliefs that convince human beings that the hierarchical relations
under which they live and work are natural and must be accommodated
D) classical economic theory and empirical methods must be applied to all areas of law in order
to arrive at decisions
40) According to the critical legal studies school of law, members of society’s elite have
constructed an interlocking system of beliefs that ________.
A) opposes existing religious order
B) contradicts political rulings meant for the lower classes
C) focuses on advancements in infrastructure
D) reinforces established wealth and privilege
41) What is the primary argument raised by traditional critics of the critical legal studies school?
A) Critical legal theorists have constructed an essentially negative position without developing
concrete strategies to bring about improvements.
B) Critical legal theorists tend to base their pronouncements on female-dominated scholarship.
C) Critical legal theorists pay too much attention to law without considering the effects of
morality.
D) Critical legal theorists tend to downplay the interaction between statutory and common law.
42) Julia believes that the current jurisprudence reflects a male legislature and judicial system,
and that women’s views are underrepresented. Based on this scenario, she belongs to the
________ school of jurisprudence.
A) feminist
B) positivist
C) critical
D) law and economics
43) Carlos believes that most court decisions and legal doctrines are best understood as efforts to
promote an efficient allocation of resources in society. Carlos adheres to the ________ school of
jurisprudence.
A) natural law
B) positivist
C) sociological
D) law and economics
44) Case law results from judicial ________ of constitutions and statutes.
A) nullification
B) execution
C) interpretation
D) enforcement
45) Jurisprudence is the science or philosophy of law, or law in its most generalized form.
46) Plato believed that law is a rule of conduct, a contract, or an ideal of reason.
47) Hobbes believed that law is the command of the sovereign.
48) Disciples of the positivist school would argue that when Congress has not acted on a matter,
the Supreme Court has no power to act on that matter.
49) The feminist school bases legal precedent only on cases involving plaintiffs and defendants
who were female.
50) Some proponents of the feminist school have argued that the First Amendment was authored
by men and is presently interpreted by male-dominated courts to allow pornographers to make
large profits.
51) State the top ten reasons for studying the legal environment of business.
52) List and describe the various schools of jurisprudence.
53) Explain the characteristics of the natural law school.