Lesson 5


Question 1

The Founding Fathers of America believed that the primary function of Government is to __________________.

  • A Ban physical force from the marketplace and all human affairs
  • B Guarantee its citizens basic necessities like food, shelter, and basic ‘living wage’
  • C Create jobs through taxation and public works programs
  • D Manage the monetary system and distribute money in an equitable way

Question 2

Retaliatory force is _________________.

  • A Force used only with the permission/blessing of a majority vote (ex: The United States gets the majority vote of the American people or the United Nations to invade another country)
  • B Force used to stop a person/group who first initiates force (ex: A policeman using a gun to stop a person from robbing a store)
  • C A type of “non-coercive force” where someone offends another to such a degree that the government needs to step in to protect the offended individual (ex: A speaker on campus insults a group’s beliefs or religion, so the government steps in to prevent the speaker from delivering his lecture)
  • D A type of “economic force” where a business is so successful and gains so much market share that the government must step in and break up the company (ex: Microsoft takes up so much of the market on computers that the government must step in and force it to sell aspects of its company)

Question 3

George Washington believed that if a good and just government were put in place, then (barring accident or illness) a person should have no reason not to be happy. If he or she were to become unhappy, the fault would lie entirely with him/herself.

  • A True
  • B False
  • C
  • D

Question 4

Which of the following government activities would the Founding Fathers have approved of?

  • A Picking winners and losers (through taxes and subsidies) in the marketplace
  • B Requiring permission (permits, approvals, and licenses) for most types of economic activity
  • C Prohibiting activities it disapproves of regardless of whether it violates individual rights
  • D All the above

Question 5

The difference between legitimate laws and business regulations are _______________.

  • A Regulations go beyond protecting individual rights and securing property, often forcing producers and consumers to act differently than they otherwise would if left free
  • B Business regulations apply to businesses, where as legitimate laws apply only to individuals
  • C Without business regulations there would be nothing to prevent businesses from recklessly collapsing the economy and polluting our streams, rivers, oceans, and air
  • D All the above

Question 6

Which is NOT a reason government regulates business?

  • A To make commerce more “regular,” “fair,” “straightforward,” or safe in the eyes of politicians
  • B To correct perceived market failures or “social injustices”
  • C To ensure businesses do not engage in ‘cut-throat business practices’ and exploit their employees and customers
  • D Both A & B

Question 7

According to a 2010 study performed by the Small Business Administration, the cost of complying with business regulations in the United States is around _________ dollars a year.

  • A $175 million
  • B $175 million
  • C $175 billion
  • D $175 trillion

Question 8

Which of the following is NOT an example of a real business regulation?

  • A The FDA regulates the size of the holes in Swiss cheese
  • B The State of North Carolina requires all beachgoers to wear a state-approved bathing suit upon entering the ocean
  • C The state of Louisiana required floral arrangers to pass a 5 hour, 200 question test to design and sell flowers
  • D The states of Washington and Utah required African Hair braiders to get 2,000 hours of training that does not include any time spent on the technique of hair braiding

Question 9

Business regulations usually undermine the very causes they are aimed at serving, either raising the cost of the regulated product/service or lowering its quality.

  • A True
  • B False
  • C
  • D

Question 10

Raising the minimum wage to say $15/hour is good idea It will have not real negative effects and can only have positive effects for workers presently making less than this amount.

  • A True
  • B False
  • C
  • D


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