1. Chapter 7 Legal Aspects of
Business
Chapter 7
©2008 Thomson/South-Western
1 Legal Aspects of Business

2. Lesson 7.1 Regulations
Maintaining Competition
Goals
 Explain how federal laws help regulate
monopolies.
 Explain how federal laws help promote fair
competition.
Chapter 7
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3.  Monopoly — exists when only one company
provides a product or service without
competition from other companies
 Natural monopoly — usually involves
providing public services, such as public
utilities, which have a fairly stable demand
and are costly to create
Chapter 7
Monopolies
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4. Promoting Fair Competition
Chapter 7
 Sherman Act
 Clayton Act
 Robinson-Patman Act
 Wheeler-Lea Act
 Federal Trade Commission
 Other federal agencies
 Bankruptcy relief
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5. Lesson 7.2 Regulations Protecting
Business and the Public
Goals
 Explain how patent, copyright, and trademark
protection benefits business.
 Describe the ways in which government
regulations protect consumers.
 Describe three methods used by state and
local governments to regulate business.
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6.  Patent — agreement in which the federal
government gives an inventor the sole right for 20
years to make, use, and sell an invention or process
 Copyright — sole right to reproduce, publish, and
sell literary or artistic work for the life of the author
plus 70 years
 Trademark — distinguishing name, symbol, or mark
placed on a good or service that is legally reserved
for the sole use of the owner
Chapter 7
Intellectual Property
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7. TRADEMARKS
 Names
 Symbols
TRADEMARKS
 Names
 Symbols
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Intellectual Property
PATENTS
 Motors
 Mousetraps
 Games
 Computers
PATENTS
 Motors
 Mousetraps
 Games
 Computers
COPYRIGHTS
 Software
 Novels
 Histories
 Poetry
 Textbooks
COPYRIGHTS
 Software
 Novels
 Histories
 Poetry
 Textbooks
7 Legal Aspects of Business

8. Regulations Protecting the Public
 Food and drugs — Food and Drug
Administration (FDA)
 Nonfood products — Federal Trade
Commission (FTC), Consumer Product
Safety Act
 Information — Electronic Communications
Privacy Act
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9. State and Local Regulations
 Licensing — a way to limit and control those
who plan to enter certain types of businesses
 Public franchise — contract that permits a
person or organization to use public property
for private profit
 Building codes (control the physical
features of structures) and zoning (specifies
which land areas may be used for homes
and for different types of businesses)
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9 Legal Aspects of Business

10. Lesson 7.3 Business Taxes
Goals
 Discuss the nature of taxes and the fairness
of progressive, proportional, and regressive
taxes.
 Identify and explain the most common types
of taxes that affect business.
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11.  Proportional tax (also called flat tax) — tax
whose rate remains the same regardless of
the amount on which the tax is imposed
 Progressive tax — tax based on ability to
pay
 Regressive tax — tax whose rate decreases
as taxable amount increases
Chapter 7
Fairness of Taxation
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12.  Income tax — tax on the profits of businesses and
the earnings of individuals
 Sales tax — tax levied on the retail price of goods
and services at the time of sale
– Excise tax — applied only to selected goods or services
 Property tax — tax on material goods owned, such
as real property tax (real estate) and personal
property tax (movable possessions)
Chapter 7
Types of Taxes
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13. Comparative Tax Rates
Spain
Fance
Sweden
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60
50
40
30
20
10
0
Japan
UK
U.S.
Canada
Greece
Norway
Germany
Tax rate %
13 Legal Aspects of Business