Deck 28: Government Regulation of Business

Question 1

The authority of government to regulate business is based on

A) court decisions.
B) regulations of administrative agencies.
C) statute law.
D) all of these.

Answer 1

D

Question 2

Both state and federal governments have enacted antitrust laws.

Answer 2

True

Question 3

All restraints of trade are a violation of the Sherman Act.

Answer 3

False

Question 4

Administrative agencies exist at federal, state, and local levels.

Question 5

All monopolies are illegal.

Question 6

Zoning boards operate at the local government level.

Question 7

The Occupational Safety and Health Administration is a state administrative agency.

Question 8

The Sherman Act was enacted to prevent fraud in the sale of securities.

Question 9

Price fixing among businesses is legal as long as it results in lower costs.

Question 10

Sunday laws, while legal, are gradually being repealed or ignored.

Question 11

The federal government's power to regulate interstate commerce comes from the U.S. Constitution.

Question 12

Public utilities are considered to be legal monopolies.

Question 13

A state has the right to regulate the activities of a corporation doing business in that state.

Question 14

In order to protect the environment, government may regulate how businesses dispose of their wastes.

Question 15

A sales tax is a form of government regulation.

Question 16

A government regulation, to be valid, must be

A) approved by the voters.
B) needed to promote a public interest.
C) reasonable.
D) needed to promote a public interest and reasonable.

Question 17

The purpose of government regulation is

A) to maintain competition.
B) to protect the rights of consumers, employees, and owners.
C) to protect the environment.
D) all of these.

Question 18

Government regulation protects the rights of

A) consumers.
B) employees.
C) stockholders.
D) all of these.

Question 19

Congress has almost unlimited power to control business activity.

Question 20

Business activity that a state has authority to regulate within its borders is called

A) interstate commerce.
B) multicounty commerce.
C) municipal commerce.
D) intrastate commerce.

Question 21

Laws that prohibit the sale of certain goods on a certain day of the week are called

A) nonprofit laws.
B) Sabbath laws.
C) blue-sky laws.
D) Sunday laws.

Question 22

Government regulation of business can be achieved through

A) income taxes.
B) sales taxes.
C) payroll taxes.
D) all of these.

Question 23

____________________ refers to the authority of government to regulate business activity for the general welfare of the public.

Question 24

The only one of the following industries that has not been deregulated with regard to rates and routes is

A) airlines.
B) railroads.
C) motor carriers.
D) television stations.

Question 25

An example of an illegal monopoly is

A) a national labor union.
B) the only electric company in the state.
C) a commuter airline that has eliminated competition by slashing prices.
D) the only farmers' cooperative in three states.

Question 26

The sale of securities is regulated by the

A) Federal Reserve Board.
B) Securities and Exchange Commission.
C) New York and American stock exchanges.
D) Federal Reserve Board and the New York and American stock exchanges.

Question 27

The most heavily regulated industry in the United States is the

A) airline industry.
B) securities industry.
C) pharmaceutical industry.
D) television industry.

Question 28

The purpose of licensing laws is

A) to protect the public.
B) to require persons to meet educational standards.
C) to require applicants to show competence.
D) all of these.

Question 29

A(n) ____________________ exists when a company deliberately and unlawfully eliminates its competition.

Question 30

The main purpose of government regulation of the securities industry is to

A) evaluate securities.
B) provide full disclosure.
C) prevent fraud.
D) provide full disclosure and to prevent fraud.

Question 31

An example of an administrative agency at the local level would be

A) a professional licensing board.
B) a zoning board.
C) a public utility commission.
D) none of these.

Question 32

The most important law passed by Congress to prevent monopolies is called the

A) Miller-Tydings Act.
B) Russell Act.
C) Sherman Act.
D) Fair Trade Act.

Question 33

Congressional power to protect the environment arises from Congress's constitutional power to

A) regulate intrastate commerce.
B) provide for the general welfare.
C) impose taxes.
D) regulate business.

Question 34

The only type of monopoly that is prohibited by law is

A) one that raises prices.
B) one that arises from unlawful acts.
C) one that causes business failure.
D) none of these.

Question 35

The power to regulate commerce arises from the ____________________ clause of the U.S. Constitution.

Question 36

Laws enacted by both state and federal governments to prevent monopolies are called ____________________.

Question 37

Business activities conducted in more than one state are known as ____________________.

Question 38

To obtain a license to sell real estate, an applicant must

A) meet minimum educational standards.
B) be an adult.
C) have a certain amount of experience.
D) meet minimum educational standards and have a certain amount of experience.

Question 39

Price discrimination is

A) the ability of consumers to compare prices of similar products.
B) illegal because it eliminates competition.
C) another term for government's effort to regulate utilities costs.
D) none of these.

Question 40

Administrative agencies created by Congress have

A) executive power.
B) legislative power.
C) judicial power.
D) all of these.

Question 41

Blair picked up a confidential memo on the sidewalk stating that a certain corporation was being bought out. If he buys that company's stock, has he violated the insider trading laws?

Question 42

Ace Trucking and Blair Packaging signed an agreement to lower prices for those customers who used both their services. Is this an unlawful restraint of trade?

Question 43

The law that prohibits any combination in restraint of trade is the ____________________ Act.

Question 44

Owens Corp. and Turner Electrical Supplies were the only two electrical supply companies operating in two neighboring states. The two companies exchanged information on their products, agreed to sell their products at the same prices, and decided the sales territories in the two states between them. Were these actions legal?

Question 45

A(n) ____________________ is a person who benefits from private information received from a corporate insider.

Question 46

Independent regulatory agencies are created by ____________________.

Question 47

The administrative body that regulates the sale of securities is the ____________________.

Question 48

Pauley owns and operates the only grocery store in a small town of about 500 residents. Has Pauley violated the antitrust laws by creating a monopoly?

Question 49

____________________ are government bodies created by Congress or a state legislature to act in the public interest.

Question 50

James, a baseball fan, sued to have the National Baseball League dissolved on the grounds that it was a monopoly. Will the suit succeed?