Business Law, 8e: Chapter 5

Chapter 5
Constitutional Regulation of Business:

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1. Commercial speech is protected by the First Amendment to the U.S. Constitution.: a. True
b. False

2. Under the supremacy clause, if a state and a federal law regulate the same subject matter without conflicting with each other, the state law will automatically be preempted anyway.: a. True
b. False

3. U.S. v. Lopez is one of the few modern cases to invalidate federal action based upon the Interstate Commerce Clause.: a. True
b. False

4. The equal protection clause applies to governmental and private actions.: a. True
b. False

5. The Commerce Clause grants Congress the power to regulate commerce with foreign nations, among the several states, and with Indian tribes.: a. True
b. False

6. The compelling state interest/strict scrutiny test is used by the court to determine the constitutionality of government classifications based on race, religion, and national origin.: a. True
b. False

7. The First Amendment allows government to "take" private property for public use as long as there is just compensation.: a. True
b. False

8. Obscenity is protected free speech under the First Amendment.: a. True
b. False

9. Federal administrative agencies are independent of the supervision of Congress.: a. True
b. False

10. Substantive Due Process includes notice and a fair hearing.: a. True
b. False

11. A state government's source of power to regulate business is generally its:: a. public power.
b. regulatory power.
c. commerce power.
d. police power.

12. Marty owns a gas station that is located in the heart of Detroit. All of Marty's employees live in Detroit and Marty purchases all of his supplies from suppliers in Michigan. In 1990 the Americans With Disabilities Act was passed which forbids discrimination on the basis of disability. Beginning in July of 1994, the law covers employers with fifteen or more employees. Marty has twenty employees and believes he can ignore the law because his business is purely local. Which statement is correct?: a. Marty is correct because Congress can only regulate commerce that involves at least two states.
b. Marty is correct because his business is intrastate.
c. Marty is incorrect because his business probably still has an effect on interstate commerce.
d. Marty is correct unless the gas station is located on or near an interstate highway.

13. Preemption is the concept of:: a. federal law taking precedent over state or local law.
b. the federal government sharing power with the state governments.
c. checks and balances to assure that no one branch of the federal government becomes too powerful.
d. separation of powers.

14. Procedural due process generally requires:: a. the government to make clear laws.
b. notice and a hearing before the government deprives a person of life, liberty or property.
c. commercial activity that substantially affects interstate commerce to be required.
d. laws that treat similarly situated persons the same.

15. The state of Minnesota passed a law forbidding employers in Minnesota from discriminating against applicants and employees on the basis of sexual orientation. The state's power to enact this law comes from the:: a. incorporation doctrine.
b. Commerce Clause.
c. Intrastate Commerce Clause.
d. state's police power.