Fact Pattern 4-1 You Own Priscilla's Pecans. You Employ Five People and Sell

question 238

Multiple Choice

Fact Pattern 4-1
You own Priscilla's Pecans. You employ five people and sell your pecan products in one town in Georgia. Your products are not sold in any other state.
The federal government imposes regulations on the pecan industry. The Georgia legislature issues its own safety laws that are stricter than the federal rules. Georgia also places a tax on pecan products made out-of-state because it fears those products will not be as safe as those produced in Georgia under the strict Georgia regulations.
The regulations raise the cost of doing business. To register your unhappiness with the Georgia regulations you attach a label to your products that alerts customers to the rules and expresses your view that the rules are unnecessary and too costly. You donate $10,000 to the campaign of Lucinda Snopes, a friend who is running for the legislature. She opposes the pecan law.
Buddy Reeves, the county attorney, reads the label criticizing the new safety regulations. He draws up a complaint against you and against Priscilla's for distributing inflammatory statements in commerce. He instructs the sheriff to seize your products in order to stop distribution of your statement, which the sheriff does. You contact attorney Travis Shifflett and ask him to represent you.
-Refer to Fact Pattern 4-1. Prosecutor Reeves charges that your $10,000 contribution to Lucinda Snopes is illegal under a Georgia law that prohibits corporations from donating any money to political campaigns. You argue that this law infringes on your constitutional right to freedom of speech. You are:

• A) correct, state laws may not infringe upon constitutionally guaranteed rights such as freedom of speech
• B) correct, the state restriction is too far reaching
• C) incorrect, because your speech impedes interstate commerce and so cannot be considered "free speech"
• D) incorrect, because states may prohibit the use of corporate money for supporting political candidates
• E) correct, under the ruling of Southern Pacific v. Arizona

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium in a market is not achieved or is not achievable.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or virtual territory, typically subject to the same political authority and dominant cultural expectations.

Marginal Revenue

The extra income generated from selling one additional unit of a product or service.

Marginal Cost

The rise in expense associated with the production of one more unit of a product or service.