Company X Contributes to a Group That Opposes Increases in State

question 358

Multiple Choice

Company X contributes to a group that opposes increases in state taxes. State Y has a law that prohibits businesses from donating money when the money may influence how people vote on issues. X challenges the law. A court will likely find:

• A) X is guilty of violating a valid state law
• B) the law is invalid because it impedes interstate commerce
• C) the law is invalid because it violates the First Amendment rights of the business
• D) the law is valid because it seeks only to restrict political speech by business
• E) the law is valid because states have the right to regulate political speech in general

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Definitions:

Comparative Advantage

The capability of a person, business, or nation to generate a product or offer a service with a lesser opportunity cost compared to its rivals.

Absolute Advantage

The ability of an individual, company, or country to produce more of a good or service with the same amount of resources as others.

Production Possibilities

Production possibilities involve the various combinations of different goods or services that can be produced in a given economy with available resources and technology, illustrated by the production possibilities frontier.

Production Possibilities Curve

A graphical representation that shows the various combinations of two products that an economy can produce using all its resources efficiently.