2.2 Big Business Rises

Corporations were an important addition to the industrial free-market system because they

• allowed for risk-free investing.

• could sell to faraway markets.

• had access to large amounts of funding.

• could transform raw materials into finished goods.

Social Darwinism equated being "fit" with

• surviving.

• having good health.

• being intelligent.

• being financially successful.

Why did the federal government attempt to put limits on corporations’ powers?

• to avoid having its constitutional rights threatened

• to attempt to protect consumers and competitive practices

• to fight the state courts, which usually sided with business interests

• to prevent corporations from becoming more powerful than the government

How did the Supreme Court’s ruling in the Trans-Missouri Freight Association case strengthen the federal government’s power?

• It upheld the Sherman Antitrust Act’s authority over railroads.

• It broke up the freight association.

• It put the railroads under Supreme Court control.

• It gave the Supreme Court the power to set railroad rates.

Why would big business leaders have disliked the Supreme Court’s decision in the Standard Oil case?

• because it created an uncertain climate in which to do business

• because they opposed Standard Oil’s monopoly of the oil business

• because it weakened the Sherman Antitrust Act

• because the court found the Sherman Antitrust Act unconstitutional

Which of the following is a disadvantage of corporations?

• Corporations can become so large that they have too much influence over an industry.

• Corporations are not able to market their products widely.

• Corporations have higher production costs because of their large size.

• Corporations do not invest in research to develop new products.

The point of a cartel was to

• fix prices.

• merge competing firms.

• make deals with suppliers.

• lower production costs.

One major way that businesses lowered production costs was by

• limiting their production.

• merging competing firms.

• cutting back on their labor force.

• encouraging competition for products.

Why did business leaders, such as Andrew Carnegie, set up universities, museums, and libraries?

• to profit from the expanding education sector

• to avoid paying income taxes on their wealth

• to give poor people a chance to become wealthy through education

• to prove that they did not believe in Social Darwinism

Which of the following statements about the Interstate Commerce Commission is true?

• It was involved in commerce within, but not between, states.

• It never succeeded in monitoring railroad shipping rates.

• It improved wages for railroad workers.

• It was the first federal entity to monitor business practices.