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CHAPTER 4
GOVERNMENT REGULATION OF BUSINESS
Answers to Learning Objectives
1. Government regulates business to eliminate abuses and curtail conduct considered to be
unreasonable.
Lesson Outline
1. Government regulates business in order to eliminate abuses and regulate unreasonable
conduct.
5. There are state administrative agencies, which affect businesses operated in their states.
6. Antitrust laws regulate business by promoting competition.
7. Federal antitrust laws, such as the Sherman Antitrust and Clayton Acts, apply to commerce
between two or more states. Most states also have similar antitrust laws, which prohibit
restraints of trade within their state.
an investigation should be made of potential environmental risks.
Comments on Cases
(p. 40) In this case, as in many cases, the court tried to discover what the intention of Congress
was when it enacted the legislation. Here that intention was decided by the use of the
word “may.” Lopez v. Davis, 121 S. Ct. 714
Chapter 4 Government Regulation of Business
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dominant suppliers, it would be very difficult for a new company to compete. Chicago
Bridge and Iron Co. NV v. F.T.C., 534 F.3d 410 (5th Cir.)
Discussion of Ethics in Practice
(Page 45)
In discussing whether it is ethical for government to pass a law imposing retroactive liability,
the class might be asked why we have laws, and why they are published and a matter of public
information. One reason is to inform citizens what the law is so they can know before they take
action whether it is legal.
Answers to Questions
(Page 45)
1. The government regulates business in order to eliminate abuses and to control conduct
considered to be unreasonable.
2. Administrative agencies are run either by a single administrator who serves at the pleasure of
public.
6. Once it is adopted, a rule or regulation has the force of a statute; however, people affected by
it may challenge it in court.
7. The rule of reason approach means that the courts examine and rule on the anticompetitive
effect of a particular activity on a case-by-case basis.
8. The purpose of the Water Pollution and Control Act is to restore and maintain the proper
chemistry of U.S. waters, including adjacent wetlands.