Chapter 5b All powers not specifically delegated to the federal government

Document Type
Test Prep
Book Title
The Legal Environment of Business: Text and Cases: Ethical-- Regulatory-- Global-- and Corporate Issues 8th Edition
Frank B. Cross, Roger LeRoy Miller
1. All powers not specifically delegated to the federal government are
reserved to the states.
1. Under their police powers, states can regulate private activities to
protect or promote the public order, health, safety, morals, and general
1. The full faith and credit clause ensures that rights established under a
contract in one state are honored by other states.
1. A state law that treats nonresidents different from residents may violate
the privileges and immunities clause.
1. Under the U.S. Constitution, each branch of government limits some
actions of the other branches.
1. The states can regulate any activity that substantially affects interstate
1. Under the commerce clause, a state may impose a higher tax on out-
of-state products shipped to in-state locations.
1. Preemption is a doctrine under which a state law takes precedence
over a conflicting federal law.
1. Congress may tax some states and exempt others.
1. The Bill of Rights protects individuals against various types of interfer-
ence by the government.
1. The courts determine when the laws restricting free speech are justified
by the need to protect other rights.
1. A restriction on commercial speech is valid as long as it forbids only
the expression of views on controversial issues.
1. The First Amendment protects obscene speech.
1. The First Amendment requires a complete separation of church and
1. A search warrant must particularly describe whatever is to be searched.
1. Generally, government inspectors have the right to enter business
premises without a warrant.
1. Substantive due process limits what the government can do in its
legislative capacity.
1. A law that limits only
persons’ exercise of a fundamental right is
valid under any circumstances.
1. Pretexting is the process of obtaining information by false means.
1. State laws often significantly protect individuals’ privacy rights.
1. Under the Constitution
a. neither the national government nor the states have sovereign
b. the national government and the states share sovereign power.
c. the national government has all sovereign power.
d. the states have all sovereign power.
1. Household Furnishings, Inc., distributes its merchandise on an interstate
basis. Under the commerce clause, Congress has the power to regulate
a. any commercial activity in the United States.
b. only activities that are in intrastate commerce.
c. only activities that are in local commerce.
d. only activities that are not in commerce.
1. The state legislature of Kansas enacts a statute to regulate trucking
that affects interstate commerce. This statute will be balanced in part in
terms of
a. the courts’ authority to determine that a law is unconstitutional.
b. the purpose of interstate commerce.
c. the state’s interest in regulating the matter.
d. the statute’s impact on noneconomic activity.
1. Charlie, the owner of Charlie’s Foreign Auto Repair Service, files a suit
against the state of Delaware, claiming that a state law violates the
commerce clause. The court will agree if the statute
a. affects citizens’ private activities.
b. imposes a substantial burden on interstate commerce.
c. imposes a substantial burden on the state.
d. promotes the public order, health, safety, morals, or general
1. Congress enacts a law prohibiting toys made in China from being sold
in the United States. The Hawaii state legislature enacts a law allowing
the sale of Chinese-made toys. Hawaii’s law will most likely be
a. rendered invalid under the supremacy clause.
b. rendered valid the equal protection clause.
c. struck down under the taxing and spending clause.
d. upheld under the commerce clause.
1. A decision by the Environmental Protection Agency (EPA) on the
amount of carbon that can be emitted from a car’s exhaust system conflicts
with a California state law. In this situation
a. both the decision and the law are invalid.
b. both the decision and the law apply concurrently.
c. California’s law takes precedence.
d. the EPA’s decision takes precedence.
1. Congress enacts the Supplemental Income Tax Act (SITA) to exempt
the citizens of Louisiana from their federal taxes until New Orleans is
rebuilt from the ravages of Hurricane Katrina. SITA will most likely be
a. rendered invalid under the supremacy clause.
b. rendered valid the equal protection clause.
c. struck down under the taxing and spending clause.
d. upheld under the commerce clause.
1. Mercy, the chief executive officer of Medico Hospital Corporation, claims
that certain actions by the state of New York infringe on rights
guaranteed by the Bill of Rights. Most of these rights are held to limit
a. federal governmental actions only.
b. federal and state governmental actions.
c. state governmental actions only.
d. actions by non-governmental entities only.
1. The Tourist Travelers Association wants the federal government to
spend money to build a new highway. Congress can spend revenues
a. only to carry out its enumerated powers.
b. to promote any objective that it deems worthwhile.
c. as long as the funds are spent uniformly among the states.
d. without regard to whether the expense violates the Constitution.
1. Colorado enacts a statute that bans the distribution of anonymous politi-
cal leaflets. A court would likely hold this to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect state interests.
1. Energy Corporation regularly expresses opinions on political issues.
Under the First Amendment, corporate political speech is given
a. little protection.
b. no protection.
c. significant protection.
d. total protection.
1. Direct Mail Sales, Inc., regularly advertises its products. Under the First
Amendment, in comparison to noncommercial speech, these ads are
a. equal protection.
b. less protection.
c. more protection.
d. no protection.
1. Congress enacts the Advertising Restriction Act (ARA. The ARA will be
considered valid if it directly advances a substantial government interest
a. goes no further than necessary.
b. without regard to how “far” it goes.
c. parties affected by it can elect how “far” to apply it.
d. goes further than necessary to ensure full coverage.
1. Iowa enacts a law that restricts certain kinds of advertising to protect
consumers from being misled. This law would likely be held by a court
to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect state interests.
1. Adult Shoppe in Beach City sells a variety of publications, including
child pornography. Beach City enacts an ordinance prohibiting the sale
of such materials. This ordinance is most likely
a. an invalid restriction of individuals’ privacy.
b. an unconstitutional restriction of speech.
c. a violation of adults’ rights to enjoy certain privileges and
d. constitutional under the First Amendment.
1. Brad stands in front of Rustler’s Round-Up Café, shouting “fighting
words” that are likely to incite Rustler’s patrons to respond violently.
The First Amendment protects such speech
a. all of the time.
b. none of the time.
c. only if it is noncommercial.
d. only if it is symbolic.
1. Kansas enacts a law requiring all businesses in the state to donate 10
percent of their profits to Protestant churches that provide certain
services to persons whose income is below the poverty level. Lo-Price
Stores files a suit to block the law’s enforcement. The court would
likely hold that this law violates
a. no clause in the U.S. Constitution.
b. the establishment clause.
c. the free exercise clause.
d. the supremacy clause.
1. Ralph, an investigator for the Securities and Exchange Commission,
goes to the offices of Trust & Worthy Accountants to inspect Trust &
Worthy’s clients’ business records. Government inspectors generally
have a right to enter business premises
a. only with a warrant.
b. without a warrant.
c. once the issuance of a warrant has been sought.
d. under no circumstances.
1. Justice For All, a political organization, files a claim to challenge a
Colorado statute that limits the liberty of
persons to broadcast
“annoying” radio commercials. This claim is most likely based on the
right to
a. equal protection of the law.
b. privacy.
c. procedural due process.
d. substantive due process.
1. Harbor Town enacts an ordinance to allow only a few street vendors to
operate in certain areas, for the purpose of reducing traffic. A court
would likely review this ordinance under the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
1. A state legislature enacts a statute that prohibits the advertising of
video games “because the games might be harmful to minors.” Despite
this new statute, the president of Games Marketing, Inc. (GMI), orders
GMI marketers to place ads in any media. When a GMI ad appears on
HDTV, a local television station, GMI and HDTV are charged with
violating the statute. What is the defendants’ best defense against a
1. The Alabama Consumer Protection Agency (ACPA) investigates the
marketing practices of Beta Sales, Inc. The ACPA serves a subpoena
on Beta, ordering the firm to provide certain business records, including
its marketing agreements with other companies. Beta refuses to comply
with the subpoena. On what is Beta most likely basing its refusal? Is a
court likely to support Beta’s position? Why or why not?

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