Page 195 - Business Principles and Management

C HAPTER 7 A SSESSMENT

APPLY WHAT YOU KNOW

20. Discuss how a business that has a monopoly on a good or service
can keep its prices unreasonably high.

21. Explain why it is necessary for the federal government to pass laws
promoting fair competition.

22. Explain why state and local governments would want to regulate
businesses.

23. Explain how it is possible for a business to continue operating even
after it has filed for bankruptcy.

24. Explain how a computer software program might be both copy-
righted and licensed.

MAKE CONNECTIONS

25. Research Use the library or the Internet to research the history of the
Sherman Antitrust Act. Identify the unethical business practices that
led to the passage of this law. Identify the most recent use of this act.
Specify how the U.S. economy is stronger because of the Sherman
Antitrust Act.

26. Math You live in a state that has the following tax schedule:

Taxable Income Rate
$0–$6,999 no tax
7,000–14,999 5%
15,000–24,999 6%
25,000 and over 7%

Your state allows everyone $2,000 of exemptions from total
income to arrive at taxable income. Your total income this year
is only $12,000 because of work lost due to illness. Your friend’s
total income is $19,000.
a. What is your tax this year? What is your friend’s tax?
b. What is the actual tax rate you and your friend paid this year
based on your total incomes?

27. Writing You work for one of three manufacturers that sells nationally.
You have heard that your company has discussed prices of a product
that all three manufacturers sell but that has become unprofitable to
each. These companies believe that it is foolish to sell at a loss. They
all agree to raise prices, but they do not agree on how much each will
charge. Write a memo outlining your feelings about this action. Refer
to specific federal regulations as necessary.

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