Test Bank

August 9, 2017 | Author: Lê Kiến Trúc | Category: Online Shopping, E Commerce, Sales, Advertising, Retail
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Chapter 1 Overview of Electronic Commerce 1-According to Peter Drucker, e-commerce is profoundly changing markets, industry structures, products and services, consumer segmentation, consumer values and consumer behavior; jobs, and labor markets. True


2-By purchasing a textbook from Amazon.com and having the merchandise physically delivered, Amazon.com would be considered a click-and-mortar organization because pure EC did not occur. True


3-In the field, a sales representative writes notes with a mobile handwriting-recognition computer immediately after a sales call. This can be viewed as an EC activity. True


4-In addition to EC being conducted via the Internet, EC can be conducted over local area networks (LANs). True


5-An example of business-to-consumer (B2C) is when Dell provides customer service online by collaborating electronically with its partners. True


6-An internal corporate network that uses Internet tools, such as Web browsers, is known as an intranet. True


7-An extranet is a network that uses the Internet to link together multiple intranets. True


8-Purchasing a Dell computer online for use at home is an example of e-tailing. True


9-Networked computing connects multiple computers and other electronic devices that are located in various locations by telecommunications networks, including wireless ones. True


10-When Dell purchases Godiva chocolates as gifts for its employees and has Godiva mail them directly to the recipient Dell is engaged in B2B2C. True


11-Peer-to-peer (P2P) technology can be used in C2C, B2B, and B2C. True


12-The final participants in B2B transactions are consumers. True


13-Doing your banking on an Internet-enabled cell phone is an example of m-commerce. True


14-Despite the many e-tailing EC companies that have failed in the past, the dot-com failure rate has recently declined sharply. True


15-Since 2001, no other company has had more of an impact on EC than MySpace. True


16-Wikipedia.com, a Web site that allows people to work together online and share information, is an example of Web 2.0. True


17-The digital economy refers to an economy based on digital communication networks, computers, software, and other related information technologies that provide a global platform over which people and organizations interact, communicate, collaborate, and search for information. True


18-Economic, legal, societal, and technological factors have created a highly competitive business environment in which customers are becoming less powerful. True


19-Strong competition and increased power of consumers are two of the major market pressures in today's business environment. True


20-Business models are a subset of a business plan or business case and refer to methods of doing business by which a company can generate revenue. True


21-A business model outlines how the organization or the EC project will generate revenue through sales, transaction fees, advertising fees, affiliate fees, or other revenue sources. True


22-A value proposition refers to the tangible and intangible benefits that a company can derive from using EC making it an important part of the marketing plan. True


23-Affiliate marketing is an EC business model of word-of-mouth marketing in which customers promote a product or service to friends or other people. True


24-Social networks, such as Facebook, YouTube, and MySpace, are Web sites that connect people with specific interests by providing free services such as photo sharing, e-mail, and blogging. False


25-Many companies used a corporate portal, which is a gateway for customers, employees, and partners to reach corporate information and communicate with the company. False


26-Dell's cornerstone business model is based on the concept of: selling directly to small and medium sized businesses.

rapid business build-to-order which allows growth and customers to configure their threatening own customized systems. competitors.

e-collaboration with a few select business partners.

27-________ refers to the buying and selling of goods and services; servicing of customers; collaborating with business partners; and conducting electronic transactions within an organization. Partial EC


Pure EC


28-EC can take several forms depending on the degree of digitization of the following three dimensions: the product or service sold, the process, and the delivery method.

the payment method, the marketing channel, the delivery method, the agent, and the and the production collaboration method. method.

the business process, the collaboration, and the transaction.

29-Purely physical companies are referred to as ________ companies, whereas companies that are engaged only in EC are considered ________ companies. virtual; pure play click-and-mortar; click-and-brick brick-and-mortar; virtual pure play; virtual

30-The ways in which EC is done include: the Internet, the Internet, value-added networks, on the Internet extranets, and local area networks using intranets, or on and extranets. private networks. a single computerized machine.

the Internet and private networks.

31-________ are systems where only routine transaction processing and information flow take place between two or more organizations using a standard protocol, such as electronic data interchange (EDI). Intrabusiness EC



Interorganizational information systems

32-A business such as Apple Computers making online transactions with its trading partners is an example of: e-CRM




33-EC applications are supported by infrastructure and by each of the following support areas EXCEPT: People

Marketing and advertisement

Mobile devices

Public policy

34-Intrabusiness EC is usually performed over intranets and/or ________. P2P networks


mobile networks

corporate portals

35-A technology that is used to electronically transfer routine documents, such as invoices and purchase orders, and for financial transactions is ________. Exchange-to-exchange Electronic data interchange

Electronic funds transfer Peer-to-peer

36-Challenges that Boeing faced with its global collaboration for the design and assembly process of its new Dreamliner passenger plane included each of the following EXCEPT: Information security Lag time Teams working across various time zones

Data management

37-A large number of EC companies, especially e-tailing and B2B ones, failed from 1999 to 2005 for each of the following reasons EXCEPT: The companies failed to ensure The companies The companies had they had sufficient inventory and lacked financial little marketing a distribution setup to meet skills. experience. initial demand.

The companies failed to register with search engines, such as Google.

38-________ refers to the second-generation of Internet-based services that let people collaborate and share information online in new ways, such as social networks and wikis. Virtual Web

Social Web

Media Web

Web 2.0

39-Which of the following is not a characteristic of the Digital Revolution? A high rate of obsolescence.

Intelligent search agents to Fraud and other help manage information cybercons carried out overload. via the Internet.

Many business processes are expedited by up to 50 percent.

40-Because the rate of change and the level of uncertainty are expected to accelerate, organizations are considering less information when making decisions.

operating under increasing pressures to produce more products, faster, and with fewer resources.

making fewer unable to react quickly decisions and/or enough to threats and decisions less opportunities. frequently.

41-According to the Business Environment Impact Model, ________ provide support to organizations' activities and to actual performance, countering business pressures. core competencies and critical response activities

missions and strategies

EC and IT

markets and government

42-A ________ is a company's method of doing business to generate revenue to sustain itself. marketing strategy

business model

business plan

value chain

43-According to the ________ revenue model, companies receive commissions for referring customers to others' EC Web sites. affiliate fees

advertising fees

subscription fees

transaction fees

44-According to the ________ revenue model, customers page a fixed amount, usually monthly, to receive some type of service. transaction fees

affiliate fees

subscription fees

advertising fees

45-Large private organizational buyers and government agencies make large-volume or large-value purchases through ________, also known as reverse auctions. name-your-own-price models

viral marketing

online direct marketing

electronic tendering systems

46-According to the ________ model, an organization can increase brand awareness or even generate sales by Web-based word-of-mouth marketing or promoting a product or service to other people. electronic tendering systems

viral marketing

name-your-own-price models

online direct marketing

47-Online group purchasing organizations are known as: e-co-ops




48-Major barriers to EC include all of the following EXCEPT: implementation difficulties

lack of technology

lack of potential customers

49-Which of the following is a technological limitation of EC?


Difficulty Security and privacy obtaining venture concerns that deter capital. customers from buying.

Unresolved taxation, Order fulfillment public policy, and legal requirements of largeissues. scale B2C.

50-A job opening in the Sales Department posted on the company's Intranet by the Human Resources Department is an example of: B2S




51-Boeing designing a product together with a business partner is this type of interaction: B2B2C

Nonbusiness EC


Collaborative Commerce

52-A corporation uses the Internal Revenue Service's Web site to learn how to pay its estimated quarterly income taxes. This is an example of: G2G




53-The second-generation of Internet-based services that lets people collaborate and share information online is known as Web 2.0. An example of this is: mp3.com




54-The digital enterprise shifts the focus from managing individual information resources such as devices, applications, and data to ________ that define the business and ultimately deliver value to customers and end users. transforming revenue models

developing models

organizing supply chains

orchestrating the services and workflows

55-Many companies employ a(n) ________, which is a gateway for customers, employees, and partners to reach corporate information and to communicate with the company. corporate portal


social network

Chapter 2 E-Marketplaces


1-The functions and efficiency of an e-market are the same as that of a physical marketplace. True


2-The emergence of electronic marketplaces has resulted in lower information search costs for buyers and lower transaction and distribution costs for sellers. True


3-Although both marketplaces and marketspaces can sell physical products, the marketspace also can sell digital products, which are goods that can be transformed to digital format and delivered instantly over the Internet. True


4-Front end refers to the activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery. True


5-In marketing, an intermediary is a third party that operates between sellers and buyers. Intermediaries of all kinds offer their services on the Web. True


6-WebMD, which is the largest U.S. medical services company, is known mainly for its webmd.com consumer portal, but its core business is being an e-intermediary. True


7-The major B2B e-marketplaces are electronic storefronts, Internet malls, and exchanges. True


8-A portal is an information gateway that attempts to address information overload by enabling people to search and access relevant information from disparate IT systems and the Internet, using advanced search and indexing techniques, such as Google's desktop. True


9-Intermediaries are human or electronic agents that play an important role in EC by providing value-added services such as making payment arrangements to buyers and sellers. True


10-Travelers using airline Web sites to book their flights directly without the use of travel agents is resulting in the reintermediation of travel agents. True


11-Search engines not only "search and match," but also have capabilities that can be used to perform routine tasks that require intelligence. True


12-An electronic shopping cart is an order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop. True


13-Shopping carts for B2B are fairly simple, but a shopping cart for B2C may be more complex. True


14-An auction is a competitive process and market mechanism that uses a competitive process by which a seller solicits consecutive bids from buyers or a buyer solicits bids from sellers. True


15-Negotiation and bargaining are two types of auctions where prices are not fixed, but rather are allowed to fluctuate as market supply and demand change. True


16-Reverse auctions are bidding or tendering systems in which the buyer places an item for bid on a request for quote (RFQ) system; then potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins. True


17-E-auctions are becoming less important selling and buying channels for companies and individuals. True


18-The major limitations of e-auctions are insufficient security, risk of fraud, and a limited pool of participants. True


19-A limitation of e-bartering for businesses is that excess capacity items such as office space, storage, factory space; idle facilities; and labor cannot be bartered. True


20-Online negotiation can be facilitated by computer technology for the negotiation process and software agents for searches and comparisons. True


21-Due to the lack of hurdles, the adoption and growth of m-commerce has been widespread. True


22-The Internet economy's low barriers to entry are both an opportunity and a threat to businesses. True


23-Strong competition for commodity-type products, such as toys and CDs, was a major contributor to the collapse of many dot-com companies, which suggests that a company needs to use innovative strategies to survive and prosper in the Internet economy. True


24-Because the strength of each of Porter's five forces varies considerably from industry to industry, it would be a mistake to draw general conclusions about the impact of the Internet on long-term industry profitability. True


25-Because of intense competition on the Web, new companies cannot establish good corporate images quickly as Amazon.com had done when it had few online competitors. True


26-Fundamentally, the success of the pure-play jewelry e-tailer Blue Nile was due to the company's use of Internet technologies to: offer lower prices than competitors eliminate intermediaries go public provide quality ratings

27-Traditional and electronic markets have three main functions, which include each of the following EXCEPT: providing an institutional matching transforming raw infrastructure, such as a legal and buyers and materials into regulatory framework that sellers. finished products. enables the efficient functioning of the market.

facilitating the exchange of information, goods, services, and payments associated with market transactions.

28-Digital products have different cost curves than those of regular products because:

in digitization, most of in digitization, all in digitization, most of in digitization, most of the costs are fixed, and of the costs are the costs are variable the costs are fixed, but variable costs are very variable. and fixed costs are low. variable costs are high. low.

29-The portion of an e-seller's business processes through which customers interact, including the seller's portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway is referred to as the ________ of the business. front end



back end

30-All the activities that are related to order aggregation and fulfillment, inventory management, purchasing from suppliers, accounting and finance, insurance, payment processing, packaging, and delivery are done in what is termed the ________ of the business. front end

back end



31-The major ________ e-marketplaces are storefronts and Internet malls. B2C




32-An electronic storefront includes several mechanisms that are necessary for conducting the sale. The most common mechanisms include each of the following EXCEPT: a search engine

an electronic catalog;

a supply chain

a payment gateway

33-________ are online markets owned and operated by a single company and may be either sell-side or buy-side. Commercial portals

Private e-marketplaces

B2B marketplaces


34-A(n) ________ is a single point of access through a Web browser to help users find relevant and accurate business information and reduce information overload. intermediary


search engine

information portal

35-Finding relevant and accurate information is often time-consuming and requires access to multiple systems causing organizations to lose a lot of productive employee time. One solution to this problem is the use of: intermediaries.




36-A type of broker that helps consumers compare different stores is a: shopping facilitator.


search agent.

virtual mall.

37-Human or electronic intermediaries attempt to address each of the following limitations of direct interaction EXCEPT: lack of privacy for those wanting to remain anonymous.

contract risk.

search costs.

product distribution.

38-The elimination of various types of agents that mediate between buyers and sellers, such as travel and insurance agents, is referred to as: remediation




39-A mode is purchasing where prices are negotiated or discounted is ________, which refers to nonfixed prices, such as those in auctions or stock markets. pre-shopping

dynamic pricing

commodity pricing


40-Although used occasionally in B2C commerce, customized catalogs are especially useful in B2B e-commerce for each of the following reasons EXCEPT: e-catalogs can show e-catalogs can show the buyer's ID only the items that the number for the item, employees in a specific model, or SKU organization are number rather than allowed to purchase. the seller's ID numbers.

E-catalogs can be customized to show the Intranets, in same item to different particular, can deliver customized customers at different catalogs to different prices, reflecting discounts business customers. or purchase-contract agreements.

41-To be successful and useful, large e-catalogs need a(n) ________.

search engine

data mining technology

enhanced viewing capability


42-A ________ has capabilities that can be used to perform routine tasks that require intelligence such as providing customers with assistance based on their movements on a Web site. intelligent engine

search engine

software engine

software agent

43-Popular search engines include all of the following EXCEPT: Google




44-A(n) ________ is an order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop. merchant server

e-fulfillment agent

intelligent agent

electronic shopping cart

45-The most common and traditional form of auctions in which one seller entertains bids from many buyers is referred to as: e-auctions.

forward auctions

double auction.

reverse auctions.

46-An auction in which there is one buyer and many potential sellers; or in which a buyer places an item for bid on an RFQ system and the lowest bid wins is referred to as all of the following EXCEPT: tendering system.

forward auctions.

bidding system.

reverse auctions.

47-What is a benefit of e-auctions to sellers? Anonymity.

Convenience since the bidding can High stickiness to The optimal price is the Web site. determined by the market. occur anywhere and any time.

48-Organizations are embracing mobilized computing technologies for several reasons EXCEPT: The prices of notebook computers, Wireless security

It improves the

Wireless telecom

wireless handhelds, and smart phones continue to fall and their capabilities continue to increase.

problems have been productivity of workers in the solved with field. encryption.

support for mobility is growing quickly.

49-EC competition is very intense because online transactions enable each of the following EXCEPT: Higher prices because of a greater number of potential buyers.

Setting up a Web site is relatively easy and inexpensive, and doing so reduces the need for a sales force and brick-and-mortar stores.

For buyer, e-markets reduce the cost of Product or service searching for product differentiation and information; e.g., sellers, personalization. models, prices, frequently to zero.

50-Which of the following statements about differentiation and personalization is not correct? Consumers like differentiation and personalization and are frequently willing to pay more for them.

Products must be differentiated for perfect competition.

Price cutting in differentiated markets does not impact market share very much:

Differentiation reduces the substitutability between products, benefiting sellers who use this strategy.

51-It can be said that competition between companies is being replaced by competition between ________. digital products and services

networks industries differentiated products and services

52-The Internet has influenced industry structures in each of the following ways EXCEPT: Increases differences Industries are among competitors whose more efficient offerings are kept overall. proprietary.

A flood of new entrants has come into many industries because of reduced barriers to entry.

There has been a shift in bargaining and buyer power to end users.

53-Impacts of e-marketplaces on B2C direct marketing include all of the following EXCEPT: The existence of e-

EC enables

Brand images

The administrative work

marketplaces has increased the promotion of products and services through direct marketing.

customization of products and services, which is changing marketing and sales activities both in B2C and in B2B.

for new companies have become more difficult to establish.

related to physical delivery, especially across international borders, can be reduced significantly, cutting the cycle time by more than 90 percent.

54-One of the major benefits of e-markets is the improvement in supply chains with the creation of a(n) ________. logistics chain

customized chain

hub-based chain

support chain

55-________ provides customers with exactly what they want, when and where they want it. Effective communication between the supply chain and the factory floor is needed to make it happen Build-to-order manufacturing

Real-time manufacturing

Demand-driven manufacturing

Virtual manufacturing

Chapter 3 Retailing in Electronic Commerce 1-The amount and percentage of goods and services sold on the Internet is increasing rapidly, despite the failure of many dot-com companies. True


2-A retailer is a sales intermediary, a seller that operates between manufacturers and customers. True


3-Consumer electronics, including cell phone sales, are the largest category of online retail. True


4-Jewelry sales over the Internet is just beginning, but could be one of the top sellers on the Internet in the near future.



5-Offline transactions are somewhat influenced by research conducted online, with approximately one-third of online shoppers reporting that they used the Internet to research and influence their offline shopping choices. True


6-Evidence indicates that the basic principles that apply to retail success do not apply to etail success. True


7-Offering quality merchandise at good prices, coupled with excellent service, and crosschannel coordination and integration in which customers can almost seamlessly operate between the online and physical environments of a business are also important elements in successful e-tailing. True


8-Goods with the following characteristic guarantee provided by highly reliable or wellknown vendors are expected to facilitate higher sales volumes. True


9-A business model is an analysis of the organization's customers and, from that, a discussion of how that organization will achieve profitability and sustainability by delivering goods and services to those customers. True


10-Direct marketing describes marketing that takes place offline between manufacturers and retailers. True


11-Virtual or pure-play e-tailers are firms that sell directly to consumers over the Internet without maintaining a physical sales channel. True


12-Specialized businesses operate in a very narrow market and would find it difficult to survive in the physical world because they would not have enough customers or could not hold the variety of stock. True


13-All click-and-mortar retailers started life as a traditional storefront with a physical retail presence only and over time adopted an online transactional capability as well (brick only to brick-and-click). True


14-In today's digital economy, click-and-mortar retailers sell via stores, through voice phone calls to human operators, over the Internet through interactive Web sites, and by mobile devices. True


15-Although there are practical advantages to being an e-tailer, such as lower overhead costs, it has many drawbacks and barriers so the winners in many market segments will be companies that use the click-and-mortar approach. True


16-Online travel services have high margins because of their multiple revenue models including commissions, revenue from advertising, lead-generation payments, consultancy fees, subscription or membership fees, and revenue-sharing fees. True


17-The job market is characterized by high volatility and unbalanced supply and demand. True


18-In general, online real estate is replacing existing real estate agents in most markets. True


19-Many insurers are using a dual distribution strategy, by adding online distribution of standard products to their traditional agency distribution system. True


20-From a bank's perspective, online banking offers a cheap alternative to branch banking as well as a chance to enlist customers in remote areas. True


21-Egghead.com realized a substantial reduction in operating costs and inventory costs by eliminating its brick-and-mortar stores and becoming a pure-play in e-commerce. True


22-In implementing a successful click-and-mortar strategy, a company must make sure that whether a customer establishes contact through face-to-face encounters with store personnel or through the Web page, the information and service received is consistent. True


23-Investors in e-tailers which report small losses on each unit sold should not be concerned because the huge volume of business available online should more than offset these small marginal losses. True


24-Cybermediation occurs at Web sites that use intelligent agents to facilitate intermediation. True


25-Channel conflict occurs when adding an online distribution channel causes problems with existing distribution channels. False


26-Amazon.com experienced all of the following EXCEPT:

Amazon.com have trended upward, driven largely by product diversification and its international presence.

Amazon.com maintained its position as the number one etailer in 2006.

Despite increasing a sales and net profits, in percentage terms, Amazon has seen a drop in profitability in 2006, attributed to huge spending on further developing its technology infrastructure and its investment in the Amazon Prime discount shipping program.

The company's financial success has been assured.

27-According to data from eMarketer, approximately ________ shop online and/or research offline-sales online. three in four Internet users age 25 and over

two in five Internet three in four Internet users age 18 and over. users age 14 and over

two in five Internet users age 30 and over

28-All of the following categories have already been selling well online EXCEPT: pet supplies

computer hardware and software


new cars

29-Important trends in B2C EC include all of the following EXCEPT: many offline transactions online advertising are now heavily will increasingly influenced by research use rich media. conducted online.

the use of cell the Internet will influence phones to shop approximately 25 percent online is increasing of all retail sales by 2010. rapidly.

30-With all else being equal in the online environment, goods with any of the following product characteristics are expected to facilitate greater online sales EXCEPT: Relatively expensive items.

Frequently purchased items.

Digitized format.

High brand recognition.

31-Marketing that takes place without the help of intermediaries is called: pure-play e-tailing

direct marketing.



32-Dell's strategy is best described as: a click-and-mortar strategy.

direct marketing from a manufacturer.

a brick-and-mortar strategy.

a shared service mall strategy.

33-Sears marketing strategy would best be described as: a shared service mall direct marketing from a strategy. manufacturer.

a brick-and-mortar strategy.

a click-and-mortar strategy.

34-In direct marketing: sales are customers are contacted directly shipments are made directly from the seller to made in without the help of the customer. malls only. intermediaries.

electronic distributors must be used.

35-An online seller of travel services that generates revenue by charging fees for its services is an example of a(n): market maker.

transaction broker.

viral marketer.

content disseminator.

36-A marketer that uses e-mail to advertise to potential customers is called a: viral marketer.

transaction broker.

content disseminator.

market maker.

37-A company that creates and manages many-to-many markets is called a: transaction broker.

content disseminator.

market maker.

viral marketer.

38-In an e-market, Federal Express is an example of a(n): viral marketer.

content disseminator.

service provider.


39-All of the following are potential sources of revenue for online independent travel agents EXCEPT: direct marketing revenues.

advertising fees.

transaction fees.

subscription fees.

40-Which of the following is true of virtual banks? Stringent regulations have eliminated fraud risk in virtual banks.

Virtual banks have Virtual banks combine proven very successful online and traditional and profitable. branch banking services.

Virtual banks have no physical location.

41-________ are customers who are willing to shop online because they dislike going to grocery stores. Time-starved customers

New technologists

Leading edgers

Shopping avoiders

42-________ are extremely busy customers willing to shop online in order to free up time. Time-starved customers

Leading edgers

New technologists

Shopping avoiders

43-________ are those who are young and comfortable with technology. Shopping avoiders

Leading edgers

New technologists

Time-starved customers

44-All of the following are examples of interactive entertainment EXCEPT: adult sites purchasing theatre tickets online.

Internet gaming.

fantasy sports games.

45-________ are gateways to storefronts and e-malls. Shopping portals

Shopping browsers

Intelligent search engines


46-Software tools that scout the Web for stores that sell similar items at low prices are called: Shopbots.

Intelligent search engines.

Shopping portals.

Shopping browsers.

47-________ are sites that evaluate and verify the trustworthiness of e-tailers Shopping portals

Business rating sites.

Trust verification sites

Shopbot sites

48-The TRUSTe seal is an example of: a business rating.

a B2B exchange.

an intermediary.

a trustmark.

49-Charles wants to buy a John Lennon lithograph over the Internet, but he is unwilling to pay for it until he inspects it to ascertain authenticity. The auction site through which he purchases the painting agrees to hold his money until he tells them to release it to the seller. This is an example of: an escrow service.

a warranty.

a trustmark.

a verification.

50-A software agent that surveys user's reading interests, then uses machine learning to find new Web pages and news articles using neural-network-based collaborative filtering technology is called: an aggregator portal.

a real-time agent.

a learning agent.

the sponsorship model.

51-A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to do all of the following EXCEPT: speak with one leverage each channel's advantages voice. for all customers.

empower customers.

reduce refunds and exchanges.

52-The original click-and-mortar strategy used by Toys R Us failed, as did the original toy venture of Amazon.com. Afterwards, Toys R Us sold toys online through Amazon.com. This is an example of: disintermediation.

an alliance of a pure-player with a traditional retailer.


channel conflict.

53-DeFreshFish has been in business for ten years selling custom fishing lures to local fishermen through its store in a shopping mall. The company's owners are considering opening a Web site and selling their products internationally. One new risk they will face in going from a brick-and-mortar strategy to a click-and-mortar strategy is:

the risk associated with the risk that trying to comply with costs will conflicting rules and erode their regulations in many different profit margin. locales.

the risk that their products will not meet the needs of their target market.

the risks associated with shifting their cost structure from mostly fixed costs to mostly variable costs.

54-The single factor that will determine which intermediaries continue to exist and which are replaced is: the length of the relationship between the intermediary and its customers

the ability of the intermediary to match up buyers and sellers

the profitability of the intermediary

the addition of valueadded services by the intermediary

55-An e-tailer uses cookies to identify returning customers and to provide suggested products for purchase based on prior shopping behavior. This is an example of: advertising supported model.

channel cooperation.

personalization. on-demand delivery.

Chapter 4 Consumer Behavior 1-Netflix implemented intelligent agents in its movie recommendation service called Cinematch to help customers select movies they would like to watch and to better manage its inventory. True


2-Finding and retaining customers is a major critical success factor for most offline and online businesses. True


3-One of the keys to building effective customer relationships is an understanding of intelligent agents. True


4-The purpose of a consumer behavior model is to help firms understand how a consumer makes a purchasing decision to be able to influence that decision through advertising, special promotions, or other marketing method. True


5-Individual buyers do most of the actual shopping in cyberspace in terms of dollar volume of sales. True


6-Purchases by governments, private corporations, resellers, and other organizational buyers often are used to create other products or services by adding value to them. True


7-Personal characteristics of customers, such as age and income, are independent variables, which are uncontrollable variables for EC companies. True


8-Customers rarely browse online stores if they do not intend to buy. True


9-According to Internet statistics, 67 percent of consumers abandoned their shopping carts because of the lack of satisfactory product information. True


10-The two most cited reasons for abandoning a shopping cart and not making the purchase are shipping charges and security concerns. True


11-Social factors such as customer endorsement strategies and word-of-mouth are independent variables that play an important role in EC shopping and purchases.



12-Prices, advertising, promotions, and logistics are intervening variables that can be controlled by vendors. True


13-Buying decisions are the dependent variables because these decisions depend on the independent and intervening variables. True


14-An objective of conducting market research is to understand the relationships between dependent and intervening variables so that vendors can make informed decisions on the intervening variables. True


15-In the consumer decision-making process, the buyer is the person who ultimately makes the buying decision. True


16-When Chaplin's auto lease is about to expire, he decides it is time to buy a new car. This imbalance between a desired state and an actual state is called need identification. True


17-In the decision-making process, virtual catalogs and links to external sources support the evaluation and selection phase of that process. True


18-Mass marketing is an approach to marketing that treats each customer in a unique way such as fitting advertising to the customer's profile and needs. True


19-Selling as many products as possible to one customer over a long period of time and across different product lines to maximize customer value is known as relationship marketing. True


20-Segmentation refers to the matching of services, products, and advertising content to individuals and their preferences. True


21-A user profile defines customer preferences, behaviors, and demographic traits of a particular customer. True


22-A cookie is a data file that is placed on a user's hard drive by a remote Web server only when the user's gives full consent to collect information about the user's activities at a site. True


23-Attracting and retaining loyal customers is the most important issue for e-tailers because customer loyalty can lower marketing and advertising costs, transaction costs, customer turnover expenses, and failure costs such as warranty claims. True


24-Building consumer trust in EC can be achieved through integrity, which is a user's confidence in the ability of the online store to fulfill its promises such as a money-back guarantee. True


25-Clickstream data provide a trail of a user's activities in a Web site including a record of the user's browsing patterns of every page of every Web site the user visits, how long the

user remained on a page, and even the e-mail addresses of mail that the user sends and receives. False


26-According to the EC consumer behavior model, personal characteristics and environmental characteristics are classified as: intervening variables

dependent variables

decision variables

independent variables

27-The major environmental variables influencing EC purchasing are: age, gender, price, social, ethnicity, education, cultural, ethnicity, and lifestyle. and lifestyle.

price, brand, frequency of purchase, and tangibility.

social, cultural, community, regulatory, political, and legal.

28-Pricing, technical support, and logistics support are several of the ________ that can be controlled by EC vendors and sellers independent variables

decision variables

dependent variables

intervening variables

29-Because online buyer's decisions depend on numerous independent and intervening variables, decisions made by customers are classified as: intervening variables

independent variables

dependent variables

decision variables

30-Banner advertising on Web sites helps trigger a realization that there is a gap between reality and a desired state, which occurs in the ________ stage of the EC purchase decisionmaking process. information search

evaluation, negotiation, and selection

need identification

purchase, payment, and deli

31-Marketing and advertising approaches has evolved from mass marketing to market segmentation to one-to-one marketing. This evolution occurred because: the marketing concerns about focus shifted from privacy had

companies sought to decrease the number

the Internet enabled companies to better communicate with

customers to products.


of marketing campaigns.

customers and understand their needs and buying habits.

32-The core of the "new marketing model" consists of: customer relationships.

online marketing channels.

four P's–product, place, price, and customer promotion. profiles.

33-Personalization and user profiling strategies include each of the following EXCEPT: Segmenting the market based on demographics.

Building from Using questionnaires to previous collect information purchases or directly from the user. purchase patterns.

Placing cookies on a user's hard drive to collect information with or without the user's knowledge.

34-The two key factors limiting the use of personalization to more precisely target marketing efforts to individual customers are: lack of customer loyalty and service customization costs.

communication costs and filtering costs.

matching profiles with privacy and product offerings and trust issues. delivering those offerings.

35-By increasing customer loyalty, EC companies can achieve each of the following benefits EXCEPT: lower warranty claims costs.

lower resistance to competitors.

lower transaction lower marketing and costs. advertising costs.

36-What has been the impact of the introduction of EC on customer loyalty in general? There has been little Loyalty has decreased change in loyalty because of customers' because the impacts ability to shop, compare, have cancelled each and shift vendors. other out.

It is not known whether loyalty has increased or decreased.

Loyalty has increased because of targeted relationship marketing.

37-According to research, customer satisfaction with an Internet store:

depend on two types of is higher for new factors: information customers than quality and customer former customers. service quality.

drops dramatically when certain Web site features fail to perform properly, such as the content's reliability, loading speed, or usefulness.

cannot be predicted.

38-Issues related to trust in EC include all of the following EXCEPT: When parties trust As a result of trustTrust is particularly If people do not trust transference programs each other, they have important in global the security of the EC through portal affiliation, confidence that EC transactions due infrastructure, they seal of approval programs, transaction partners to the difficulty of will not feel will keep their online shopping taking legal action comfortable about communities, and customer promises. However, in cases of a dispute using credit cards to endorsements, customers are both parties in the or fraud. make EC purchases. fully confident in online transaction assume some risk. purchasing transactions.

39-Procter & Gamble (P&G) used the Internet in the new product development of Whitestrips, a teeth-brightening product. Based on this experience, P&G: could not determine the target market segments for the Whitestrips.

reduced the time-tomarket from concept to market launch by approximately two years.

decided to add Internet research to its traditional marketing test model.

learned that the cost of online surveys were about the same as similarly sized telephone surveys, but online surveys expedited research considerably,

40-All of the following are correct about market research methods EXCEPT: It is important first to understand how groups of consumers are classified or segmented.

Markets can be segmented to increase the percentage of responses and to formulate effective marketing strategies that appeal to specific consumer groups.

Market segmentation is done with the aid of tools such as data modeling and data warehousing.

Direct mail marketing methods are usually costeffective.

41-Social class, lifestyle, personality, and activities are descriptors used in ________ market segmentation. geographic


cognitive, affective, behavioral


42-To avoid getting false information from participants of online surveys, marketers learn about customers by observing their behavior using each of the following EXCEPT: Spyware that gathers user Transaction logs that Data mining to information through an Internet record user activities at analyze connection without the user's a company's Web site. clickstream data. knowledge.

Cookies that allow a Web site to store data on the user's PC.

43-According to Inmon, B2C clickstream data can reveal information each of the following EXCEPT: Which ads and promotions were effective and which were not.

Whether there are too What goods the many products for the customer wanted to customer to wade but could not find. through.

What goods the customer examined but did not purchase.

44-Web analytics and mining tools and services: simply report which pages were clicked and how long a visitor stayed there.

provide most companies with knowledge about how to use clickstream data effectively.

offer advanced functions that help marketers decide which products to promote, and merchandisers achieve a better understanding of the nature of demand.

are used to redesign Web sites quickly and on the fly.

45-Once a company knows a consumer's preferences, the company can predict, without asking the consumer directly, what other products or services that consumer might enjoy through ________. active web bugs

collaborative filtering



46-Limitations of online research methods are all of the following EXCEPT: E-mail surveys have The ethics and the lowest response legality of Web tracking. rate.

Loss of respondents because of equipment problems.

Focus group responses lose eye contact and body language.

47-Online methods of bringing new customers to a B2B site when a B2B vendor wants to grow by adding new customers or products include all of the following EXCEPT: by contacting all of its targeted customers individually to attract them to an electronic exchange.

through an affiliation service.

through Web advertising through direct such as using an ad server mail campaigns network provider.

48-The Internet introduced the concept of ________, which has enabled marketers and advertisers to interact or communicate directly with customers and consumers can interact with marketers/advertisers. one-to-one marketing

direct marketing

advertising channel

interactive marketing

49-The term ________ refers to the number of times users call up a page that has a banner on it during a specific period. click through

unique visit

ad view

conversion rate

50-The major disadvantage of banners is ________. the limited amount of time the limited amount of viewers have become their the banner is present to the information can be placed on immune to banners and cost visitor the banner seldom notice them

51-A(n) ________ is a type of pop-up ad that appears after a user clicks a link and remains while content is loading to capture the user's attention for a short time, either as a promotion or a lead-in to the site's homepage or to advertise a product or a service. keyword banner


banner exchange


52-The risks of e-mail advertising management include all of the following EXCEPT: spam


e-mail hoaxes

measuring e-mail advertising effectiveness

53-A(n) ________ is an HTML coding statement that describes the content of a Web page and is used by search engines to index the site's content so that it can be found. meta-tag



associated ad display

54-Advertising in chat rooms, blogs, or social networks can achieve each of the following EXCEPT: They improve a company's search engine ranking.

Advertising can Advertising can be become more thematic easily targeted to than on static Web customer interests. sites.

They can be used as one-toone connections between a company and its customers.

55-________ is an advertising strategy that uses word-of-mouth marketing in which customers promote a product or service by telling others about it. Affiliate marketing

Viral marketing

Ad customizing

Ads as a commodity

Chapter 5 B2B E-Commerce 1-General Motors' B2B initiatives successfully enable the auto giant to reduce inventory cost, minimize operational problems, and shorten procurement processes. True


2-Business-to-business e-commerce is also known B2B and refers to transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks. True


3-The major characteristic of B2B commerce is that companies attempt to electronically automate trading, communication, and collaboration processes in order to improve them, which cannot be done without the Internet. True


4-Supply chain improvements and collaborative commerce are a basic type of B2B which has a hub manager for supply chain improvements, communicating, collaborating, and information sharing.



5-B2B EC transactions that involve one seller selling to many buyers is called an exchange. True


6-Since business-to-consumer (B2C) transactions are segments in the supply chain, they should be examined in light of other supply chain activities such as manufacturing, procurement, shipments, and logistics. True


7-Supply chain activities usually involve communication and collaboration. True


8-With B2B2C, a business sells to a business, but also delivers small quantities to customers of the buying business. True


9-Intermediaries in B2B commerce, which may be virtual or click-and-mortar intermediaries, are third parties that broker transactions between buyers and sellers. True


10-The purchase of goods and services as they are needed, usually the purchase of commodities at prevailing market prices, is referred to as demand buying. True


11-Examples of direct materials for a food processing company are computers and communication devices. True


12-MRO stands for "maintenance, repair, and operation" which refer to indirect or nonproduction materials that support the production process. True


13-Markets that focus on providing materials or products that are used in various types of industries are known as horizontal marketplaces. True


14-Purchases of goods or services that are based on short-term contracts and frequently purchased in large quantities are known as strategic sourcing. True


15-Joining a public e-marketplace provides a business with greater buying and selling capabilities, but the tradeoff is lower supply chain power. True


16-B2B can increase the efficiency and effectiveness of supply chains or dramatically change the supply chain by eliminating one or more intermediaries. True


17-Companies that choose an intermediary to do their buying and selling will have high supply chain power and buying/selling capabilities. True


18-Transaction fees for B2B financial services are higher than for most other methods. True


19-Companies will often separate B2C orders from B2B orders because those types of orders have different order-fulfillment processes and different pricing models.



20-By using the Internet and automatic-response software agents for customer service, companies have been able to reduce their customer service costs by up to fifty percent. True


21-Forward auctions expand online sales and offer businesses a new venue for quickly and easily disposing of excess, obsolete, and returned products. True


22-Strategic sourcing requires a holistic process that automates the entire sourcing process, including order planning, RFQ creation, bid evaluation, negotiation, settlement, and order execution. True


23-A large organizations can develop an effective procurement system by creating an internal marketplace that combines the catalogs of all its approved suppliers into a single internal electronic catalog, which is searched for product availability and delivery times. True


24-With a bartering exchange, a company submits its surplus to the exchange and receives points of credit, which the company can then use to buy items that it needs. True


25-In the real world, negotiations are done primarily electronically and with negotiation support tools. True


26-Key business drivers for B2B are all of the following EXCEPT: the availability of a numerous private and the need for

the willingness of

secure broadband Internet platform.

public B2B emarketplaces.

collaborations between companies to incur higher suppliers and buyers. costs to improve collaboration.

27-B2B transactions that involve communication, design, planning, information sharing, and activites beyond financial transactions among business partners is referred to as ________. public marketplaces

trading communities


collaborative commerce

28-With ________, a business sells to a business but delivers small quantities to customers of the buying business. B2B2C




29-A(n) ________ is an online third party that brokers B2B transactions between a buyer and seller. vertical marketplace

horizontal marketplace


strategic source

30-The purchase of goods and services as they are needed, usually at prevailing market prices is referred to as: direct materials

spot buying


strategic sourcing

31-Purchases of goods and services based on long-term contracts is referred to as: direct materials

spot buying


strategic sourcing

32-________ can be supported more effectively and efficiently through direct buyer—seller offline or online negotiations, which can be done in private exchanges or private trading rooms in public exchanges. Strategic purchases

B2C commerce


Spot buying

33-What are the two types of materials and supplies that are traded in B2B?

Direct and indirect.

Horizontal and vertical.

Digital and physical.

Commodities and nonproduction.

34-Nonproduction materials such as equipment and tools that support production are called: operational materials

direct materials

virtual materials

indirect materials

35-Indirect materials are typically used in ________ activities. intermediary maintenance, repair, and operation (MRO)

sales and marketing supply chain

36-The ________ consists of a number of interrelated subprocesses that extend from the acquisition of materials from suppliers to packaging it and moving it to distributors and retailers. vertical market

horizontal market

production chain

supply chain

37-Companies that use an intermediary to do their buying and selling tend to be: low on supply chain power and low on buying/selling capabilities

high on supply chain power and high on buying/selling capabilities

low on supply chain power and high on buying/selling capabilities

high on supply chain power and low on buying/selling capabilities

38-The major B2B services include each of the following EXCEPT: Financial

Travel and hospitality

Stock trading


39-Which of the following is not one of the major benefits of B2B? Expedites Increases production processing and flexibility, permitting reduces cycle time. just-in-time delivery.

Increases opportunities for collaboration.

Enables customized online catalogs with the same prices for different customers.

40-________ occurs when B2B eliminates a distributor or a retailer.



Just-in-time delivery


41-In a sell-side e-marketplace, a business sells products and services to business customers, frequently over ________. an exchange

an intranet

a web service

an extranet.

42-Companies will usually separate B2C orders from B2B orders because B2C and B2B orders have different ________. marketing processes

accounting processes

order-fulfillment processes and different pricing models

buying and delivery processes

43-By using the Internet and automatic-response software agents, GE reduced the cost of customer service calls from $5.00 per call when done by phone to ________ per electronically answered call. $1.00




44-Some of the benefits of a(n) ________ are that distributors can check inventory, make transactions, and look up the status of their orders significantly reducing the number of phone calls, e-mails, and incorrect product shipments. electronic data interchange

custom catalog

extranet-based order-entry intranet-based order-entry tool tool

45-In selling directly, manufacturers may encounter a similar problem to that of B2C, namely ________ with the regular distributors, including corporate dealers. multichannel distribution

direct sales conflict

channel conflict

indirect competition

46-One of the major problems facing direct sellers is ________. how to manage the supply how to find chain buyers

how to find suppliers

how to advertise in traditional channels

47-The Cisco Connection Online (CCO) Web site receives over 2 million hits per month for technical assistance, ordering, order checking, or software downloads. This online service had been so well received that nearly ________ percent of all customer service inquiries and ________ percent of software updates are delivered online. 15 / 25

45 / 55

25 / 35

85 / 95

48-Companies use ________ to sell their unneeded assets for quick disposal or to easily dispose of excess, obsolete, and returned products. private auctions

reverse auctions

forward auctions


49-Benefits of using a third-party hosting company for conducting B2B auctions instead of developing an auction site in-house include all of the following EXCEPT: No redeployment of corporate resources.

No additional resources are needed such as No hardware, bandwidth, engineering resources, hiring or IT personnel. costs.

Time-to-market of several weeks.

50-A company-based acquisition site that uses e-procurement methods such as reverse auctions, negotiations, or group purchasing, to overcome the manual searching of e-stores and e-malls is referred to as a(n): aggregated catalog

buy-side e-marketplace

intermediary desktop procurement method

51-Benefits of e-procurement over traditional procurement methods include all of the following EXCEPT: Streamlining invoice reconciliation and dispute resolution.

Lowering purchase prices through product standardization, reverse auctions, volume discounts, and consolidation of purchases.

Increasing the productivity of purchasing agents.

Increasing the skill requirements and training needs of purchasing agents.

52-Major implementation challenges that companies must consider when planning eprocurement initiatives include all of the following EXCEPT: Increasing the number of Providing interfaces between Reviewing and e-procurement and integrated changing the regular suppliers and

Coordinating the buyer's information

integrating with their information systems and possibly with their business processes.

enterprisewide information systems, such as ERP or supply chain management.

procurement process itself.

system with that of the sellers.

53-Because conducting reverse auctions in B2B can be a fairly complex process, a(n) ________ may be essential. open RFQ

online directory

software agent

third-party intermediary

54-The aggregation of suppliers' catalogs on the buyer's server to make it easier to centralize and control all procurement is called a(n): bartering exchange

sell-side emarketplace

buy-side emarketplace

internal procurement marketplace

55-In general, the benefits of contract-management software include all of the following EXCEPT: Reduces contract Reduces contract-related negotiation time and efforts. risks.

Provides more efficient approval processes.

Enables standardization of contracts throughout the enterprise.

Chapter 6 Public B2B Exchanges 1-Public exchanges are many-to-many marketplaces that are open to all interested sellers and buyers and usually run by third parties. True


2-One major characteristic of all exchanges is that they are electronic trading-community meeting places for a single seller and many buyers, and possibly for other business partners. True


3-In electronic exchanges and traditional open-air marketplace, buyers and sellers can interact and negotiate prices and quantities.



4-Dynamic pricing refers to the rapid movement of prices over time and possibly across customers as a result of supply and demand matching, as in auctions. True


5-MSN or Yahoo! are types of exchanges that generate revenue through membership fees. True


6-Thomas Register is basically a directory for buyers using search engines because it does not offer any opportunity for trade or transactions on its site. True


7-Alibaba China is China's largest online marketplace for both domestic and international trade among businesspeople and a trusted community of members who regularly meet, chat, search for products, and do business online. True


8-To increase their financial viability, third-party exchanges try to partner with large sellers or buyers, financial institutions that provide payment schemes, or logistics companies to cut costs or increase market liquidity. True


9-Market liquidity refers to the degree to which a product or service can be bought or sold in a marketplace without significantly affecting its price. True


10-Agentrics is the world's largest B2C exchange for retailers, such as Sears and Best Buy, whose objective is to simplify and automate supply chain processes. True


11-Two major models of third-party exchanges are supplier aggregation and buyer aggregation. True


12-For all types of e-marketplaces, the most important key to the success of any third-party exchange is the critical mass of buyers and sellers. True


13-A consortium trading exchange (CTE) or consortia is most appropriate for fragmented markets with large numbers of both buyers and sellers. True


14-The Global Transportation Network (GTN) provides participating carriers and customers with significant cost savings because it frees individual carriers from the huge capital costs of advanced technologies. True


15-Purchasing-oriented (procurement) consortia have not yet been a successful or popular B2B consortium model. True


16-Because of their large number of buyers and sellers, B2B exchanges and other emarketplaces do not face anti-trust or other competition laws. True


17-A B2B consortium has the potential to reduce prices of individual products, thus enabling and encouraging consortium members to buy more. True


18-Dynamic trading is trading that occurs in situations in which prices are determined by supply and demand, therefore changing continuously. True


19-The strategy of providing comprehensive, quality e-service for business partners is called customer relationship management (CRM). True


20-Because of the complexity in building large e-marketplaces and exchanges, it is usually performed by a major B2B software company, such as Ariba or IBM, and a management consulting company, such as PricewaterhouseCoopers, usually participates. True


21-Company-centered networks may be a waste of money because they are used by only one buyer (buyer's industrial network) or by only one seller (seller's industrial network), and they may not be open to all. True


22-Most exchanges have the same log-on procedures, same sets of rules for fulfilling orders,and similar business models for charging for their services. True


23-Public exchanges have difficulty attracting buyers and sellers because of the transaction fees, reluctance to share information, and the availability of too many exchanges. True


24-In B2B exchanges, software agents can facilitate management of multiple trading partners and their transactions across multiple virtual industry exchanges. True


25-Good management and effective operations and rules are critical to the success of B2B exchanges because good governance provides the rules for the exchange, minimizes conflicts, supports decision making, and tries to induce the necessary liquidity. False


26-Before the Internet, the trading process for raw and partially processed chemicals, plastics, and fuel oil was each of the following EXCEPT: fragmented




27-ChemConnect is an example of a successful e-exchange with: many buyers and one few buyers and few seller. sellers.

many buyers and few sellers.

many buyers and many sellers.

28-A third party that operates an exchange and in many cases, also owns the exchange is known as a(n): intermediary



market maker

29-In the context of EC, ________ are electronic trading-community meeting places for many sellers and many buyers, and possibly for other business partners. B2C


social networks


30-From 2001 to 2006, a majority of e-exchanges: increased in size due to mergers of small eexchanges.

devised new methods to folded due to a lack of expanded by increase revenues and customers, cash, or adding business profits. partners. both.

31-An exchange whose members are in one industry or industry segment and that trades only in materials/services unique for that industry is referred to as a(n): lateral exchange

horizontal exchange

vertical exchange

commodity exchange

32-An exchange that handles materials used by companies in different industries is referred to as a(n):. lateral exchange

vertical exchange

horizontal exchange

commodity exchange

33-Light bulbs and office supplies might be purchased in a(n) ________ by both an automaker and a steelmaker. commodity exchange

vertical exchange

lateral exchange

horizontal exchange

34-In ________, the prices are usually dynamic and are based on changes in supply and demand. vertical sourcing

spot sourcing

horizontal sourcing

strategic sourcing

35-In ________, the prices are usually negotiated or fixed. spot sourcing

horizontal sourcing

strategic sourcing

vertical sourcing

36-Spot sourcing of direct materials takes place: in vertical exchanges.

in horizontal exchanges.

only in virtual exchanges.

on exchanges which operate without a market maker.

37-In spot-sourcing, prices are: dynamic and set based on supply and demand.

based solely on the cost structure of the seller.

fixed and set by set by the contract market maker

38-In an exchange where plastic components are bought and sold, the market maker collects money from the buyer, and releases it to the seller once successful delivery is completed. This is an example of: maintaining exchange policies.

maintaining exchange infrastructure.

matching buyers and transaction sellers. facilitation.

39-In an exchange where plastic components are bought and sold, the market maker purchases a new server that will be used to conduct auctions. This is an example of: transaction facilitation.

matching buyers and maintaining exchange sellers. infrastructure.

maintaining exchange policies.

40-A market maker evaluates an exchange between a buyer in the United States and a seller in Spain to ensure that import laws for the U.S. are followed. This is an example of the market maker: matching buyers and sellers.

transaction facilitation.

maintaining exchange policies and infrastructure.

interfering with exchange policies.

41-In the consortia model: a dominant player in the industry establishes the exchange and invites others to join.

several industry players come together to establish the exchange for the benefit of all.

a neutral third party establishes and manages the exchange.

the public is invited to join the exchange as a way to offset expenses

42-The exchange model in which a third party sets up the exchange and promises to run it efficiently and without bias is called the: industry giant model.

co-op model.

neutral entrepreneur model.

consortia model.

43-An exchange charges an annual fee of $25,000 for all parties who want to trade in the exchange. The revenue model in use by this exchange is the: transaction fee model. membership fee model. advertising fee model. fee for service model.

44-A market maker charges a percentage on every buy and sell made in the exchange. The revenue model in place in this exchange is the: advertising fee model. fee for service model. transaction fee model. membership fee model.

45-A market maker bills a buyer for reviewing several seller contracts and making a recommendation on what to buy and from whom. The revenue model being used in this example is the:

membership fee model. advertising fee model. fee for service model. transaction fee model.

46-All of the following are potential sources of revenue for an exchange EXCEPT: advertising fees. membership fees. fees for services rendered. shipping and handling fees.

47-When membership fees are the basis for revenue generation in an e-exchange, it has been shown that: low membership fees often result in losses to the exchange,; however, high fees discourage participation.

when fees are very low, the exchange sees greater utilization which leads to greater revenue and profit.

there should be a fee the higher the for every service fees charged, provided; there should the greater the be no free services for total profit. members.

48-The concept of liquidity for a B2B exchange is the: ease with which orders can be number of buyers ease with which amount of placed, processed, and shipped and sellers in a information flows between available cash using the exchange. exchange members. on hand. market.

49-The exchange model in which RFQs are aggregated then linked to a pool of suppliers who are notified automatically of the RFQ is the ________ model. reverse auction

buyer aggregation

supplier aggregation

seller aggregation

50-Markets in which several large sellers sell to a large number of buyers are called: differentiated markets.

seller-concentrated markets.

fragmented markets.

buyer-concentrated markets.

51-Attracting large business sellers to public exchanges is often difficult for all of the following reasons EXCEPT: competitors who are also advertising costs in it is sometimes exchange member may public exchanges difficult to recruit gain access to confidential are very expensive. large suppliers. information.

they are required to pay transaction fees even when they engage in transactions with existing customers.

52-In dealing with exchange members, the management of the exchange should: leave the management of day-to-day operations of the exchange to the members.

strive to maximize exchange revenues through charging the highest possible fees.

take special care of the companies that share ownership in the exchange.

make certain that the exchange is neutral in its dealings with all members.

53-The most attractive industries for a vertical exchange are characterized by: a few very large stagnant players that totally technology. dominate the industry.

a market in which a small number of many fragmented very large orders account for more buyers and sellers. than half the total market volume per year.

54-Brand building is important in B2B exchanges because: information flow is poor in most exchanges, making trust of suppliers very important.

it is easy for exchange members to change to another exchange.

exchange members typically buy only the best brands of product.

exchange members typically buy products at the lowest cost unless branded.

55-Using tunneling technology to improve security of communication over the Internet is called: local area network (LAN)

Internet protocol electronic data interchange virtual private network (IP) (EDI). (VPN).

Chapter 7 E-Supply Chains 1-Although a company's success is clearly dependent on finding and retaining customers, its success may be far more dependent on what is behind the Web page than on what is on the Web page. True


2-It has been well known for generations that the success of many private, public, and military organizations depends on their ability to manage the flows of materials, information, and money, which is referred to as the product life cycle. True


3-Supply chain problems can cause delays, products not being where they are required at the right time, customer dissatisfaction, lost sales, and high expenses that result from fixing the problems once they occur. True


4-The term supply chain comes from the concept of how systems and processes within an organization are linked together. True


5-A supply chain involves activities that take place during the entire product life cycle, "from dirt to dust." True


6-A supply chain can be broken into three major parts: upstream, internal, and downstream. True


7-The downstream part of the supply chain includes the activities of a company with its suppliers, which can be manufacturers, assemblers, or both, or service providers, and their connections with their suppliers. True


8-In the internal part of the supply chain, the major concerns are production management, manufacturing, and inventory control. True


9-In the upstream supply chain, attention is directed at distribution, warehousing, transportation, and after-sale service. True


10-SCM aims to minimize inventory levels, optimize production and increase throughput, decrease manufacturing time, optimize logistics and distribution, streamline order fulfillment, and overall reduce the costs associated with these activities. True


11-A major requirement for any medium- to large-scale company that is moving to EC implies an integration between all the activities conducted on the Web and the ERP/MRP/SCM solutions–in other words, creating an e-supply chain and managing it. True


12-E-supply chain management is the collaborative use of technology to enhance B2C processes and improve speed, agility, real-time control, and customer satisfaction. True


13-The success of an e-supply chain depends on managing information with strict policies, discipline, and daily monitoring. True


14-The success of an e-supply chain depends on an e-supply chain that is loosely integrated both within a company and across an extended enterprise made up of suppliers, trading partners, logistics providers, and the distribution channel. True


15-Companies can use replenishment information to reduce inventories and eliminate stocking points. True


16-By combining bar coding and wireless technologies, automobile dealers are able to scan in goods as they arrive electronically and place them in inventory up to 10 percent faster than previously. True


17-At hospitals and supermarkets, inventory reorder points have been automated so that when inventory gets down to a certain point the system will automatically notify a human of the exact amount to reorder. True


18-Functional products are staple products, such as groceries or gasoline, that have stable and predictable demand. For these products, an effective supply chain emphasizes speed, responsiveness, and flexibility rather than low costs. True


19-Pure EC companies may be likely to have more supply chain problems because they may not have a logistics infrastructure and may be forced to use external logistics services. True


20-A major limitation of RFID currently is the restriction of the environments in which RFID tags are easily read. True


21-RuBee relies on low-frequency magnetic waves to track products and transfer information. It is becoming a replacement for RFID because RuBee overcomes many of RFID's limitations. True


22-With vendor-managed inventory, retailers make their suppliers responsible for determining when to order and how much to order. The retailer provides the supplier with real-time information such as point-of-sale data, inventory levels, and a threshold below which orders are replenished.



23-The goal of collaborative planning, forecasting, and replenishment (CPFR) is to streamline product flow from manufacturing plants to retailers. True


24-Studies have shown that electronic-based collaboration and product lifecycle management (PLM) can reduce product costs and travel expenses by 50 percent, as well as significantly reduce costs associated with product-change management. True


25-As with any IT project, management needs to be able to justify the development and use of a corporate portal by comparing its cost with its benefits. The challenge is that despite the tangible benefits from investment in portal technology, such as include increased revenues and customer loyalty, most of the benefits of portals are intangible. False


26-A company's internal operations and its relationships with suppliers and other business partners are frequently: replaced by customer-facing applications.

much more complex than customer-facing applications such as taking an order online.

much less complex than customer-facing applications such as taking an order online.

as complex as customer-facing applications such as taking an order online.

27-For a manufacturer, the supply chain ends: when the customer when the supplier delivers raw when the decides he/she is materials and component parts to customer buys satisfied with a product the manufacturer. the product.

when the product is used up and disposed of.

28-The use of Web technologies to manage warehousing and transportation processes is called: collaborative planning


downstream processing


29-The e-SCM process that includes integrated production and distribution processes is: collaborative planning



supply chain replenishment.

30-The last fifteen orders from a manufacturer to its suppliers range from $100,000 to $8,740,000. This is an example of: supply inadequacy.

demand manipulation.

order instability.

the bullwhip effect.

31-B2B systems which are used for communication, design, planning, information sharing, and information discovery are called: electronic data systems.

collaborative commerce.

information aggregation systems.

electronic bartering systems.

32-All of the following would be considered c-commerce EXCEPT: connecting suppliers.

communication and collaboration with suppliers.

sharing on-demand training aggregating catalogs courses across many locations on a central server. simultaneously.

33-RFID can provide immediate, short-term, and long-term value to organizations. An example of immediate value from RFID is when: an RFID tag tells customer service which factory made the faulty product returned by a customer.

an RFID tag sends a report to the supplier every time one of its component parts is used in the manufacturing process.

an RFID tag reveals the supplier of a faulty component without the need for quality control to research component order records.

an RFID tag tells inventory control every time a roll of wire moves out of the warehouse and onto the factory floor.

34-A major block in the widespread implementation of collaborative commerce is: the theory of collaborative commerce hasn't been proven effective in real-world applications.

the technology needed isn't available.

the lack of universally accepted standards.

collaborative commerce is extremely expensive.

35-Wal-Mart and Levi Strauss collaborate on demand forecasting in order to optimize the flow of materials along the supply chain. This is an example of: reducing design cycle time.


APS. reducing product development time.

36-The purpose of CPFR is to: optimize the flow of materials along the supply chain.

minimize quality problems in supplies.

eliminate intermediaries.

ensure that members of the supply chain will have the right amount of raw materials and finished goods when they need them.

37-________ is a business strategy that enables manufacturers to control and share product-related data as part of product design and development efforts. Advanced planning and scheduling

Product lifecycle management

Internal commerce

Collaborative planning

38-All of the following are true about product lifecycle management (PLM) EXCEPT: The demand for PLM in limited because it does not apply to products that have short life cycles or are complex.

PLM tools are offered by SAP, Matrix One, EDS, and IBM.

PLM is a big step for an organization because it requires integrating different processes and systems.

PLM can have significant beneficial impacts in cycle time, design reuse, and engineering.

39-Today, many business experts agree with each of the following EXCEPT: The supply chain needs to be operationally integrated so that inventory activities link seamlessly to manufacturing activities.

Supply chain integration has reduced the intensity of competition in most industries.

The insightful way to view contemporary business is that competition exists between or among supply chains rather then individual companies.

Supply chains from the suppliers' suppliers to the customers' customers should be jointly planned and designed for overall optimality by all of the supply chain partners.

40-When planning, designing and implementing integrated supply chain operations, management requires a holistic focus that takes account all of the following primary factors EXCEPT: location and revenues.

culture, including performance measurement, monitoring, and incentives.

strategy, structure, IT and business and people. processes.

41-Software that helps integrate different types of information systems among collaborating companies is called: browser technology.


collaborative software.

extranet technology.

42-Collaborative workflow applications: have predefined workflows, but can be redefined quickly when needed.

are business process automation tools that place system controls in the hands of users.

address missioncritical, transactionoriented, high volume processes.

address projectoriented and collaborative processes.

43-Software applications that address project management concerns are examples of: administrative workflow applications.

portal applications.

collaborations workflow applications.

production workflow applications.

44-Addressing mission-critical, high-volume transaction processes is the goal of: collaborative workflow applications.

production workflow applications.

administrative workflow applications.

portal applications.

45-The steps required to approve an expense report is an example of: administrative workflow applications.

production workflow applications

collaborative workflow applications.

portal applications.

46-________ is the transfer of documents and computer files while videoconferencing. Interactive whiteboarding


Web conferencing

Data conferencing

47-The primary benefits of workflow management systems include all of the following EXCEPT: fewer chances for delay or misplaced work.

less management intervention.

increased data security.

cycle time reduction.

48-When large suppliers or buyers are involved, a workflow system: will fail because of system incompatibilities.

may be helpful for supply chain improvements.

is needed for collaborative efforts only.

is needed for both the collaborative efforts and for supply chain and production improvements.

49-Groupware is appropriate in all of the following situations EXCEPT: For groups to share ideas and opinions.

For networked environments.

For people working on different tasks or projects.

For people in the same room.

50-________ means that the communication and collaboration are done in real time. Bi-synchronous




51-All of the following are types of communication and collaboration done in real time EXCEPT: instant messaging




52-The growth in electronic meeting systems has been driven by all of the following EXCEPT: Acceptance of virtual meetings as Improvements in Reductions in the price Shorter a respected way of doing cycle times. supporting technology. of the technology. business.

53-The major benefit of group decision support systems is:

in conducting virtual meetings.

in passive listening while information is distributed.

in faster decision making with greater agreement.

in easier decision making.

54-Corporations are moving their phone systems to ________ to cut costs and boost efficiency. VoIP


video kiosks


55-All of the following apply to instant video EXCEPT: The idea is for a kind of video chat room that allows users to chat in real time and see the person(s) they are communicating with.

It is the natural result of wanting to link people via both voice and audio.

The highest quality approach is to add video cameras to the participants' computers.

It evolved from the spread of instant messaging and Internet telephony.

Chapter 8 Innovative EC Systems 1-Wikis are used for informal organizational training because it reduces the cost and time of training. True


2-E-government applies only to the interaction of the government with its business suppliers. True


3-The government-to-citizens (G2C) category includes all of the interactions between a government and its citizens that can take place electronically. True


4-Two major areas of G2C activities are "tourism and recreation" and "research and education."



5-Current voting technologies are being implemented in various countries because of the security provided by these technologies. True


6-The Government Paperwork Elimination Act and the Memorandum on E-Government ordered the top 500 forms used by citizens to be online by December 2000. True


7-The smart card system is part of a nationwide electronic benefits transfer system in the U.S. for Social Security and welfare payments and other benefit payments. True


8-Social networks, such as MySpace, Facebook, and YouTube, are rarely used by political candidates to reach voters because there are too few users of those networks who actually vote. True


9-Forward auctions are buy-side auction systems used by the government to buy large amounts of MROs and other materials directly from suppliers. True


10-Electronic filing of business taxes is available in over 100 countries, from Thailand to Finland to the United States. True


11-The U.S. Navy's Lifelines system is an example of G2E EC. True


12-The e-government transformation process from traditional delivery to full implementation is a quick process. True


13-G2B is easier to implement than G2C. True


14-One of the most important issues in implementing e-government is its adoption and usage by citizens. True


15-The topic of e-learning is gaining much attention, especially because world-class universities such as MIT, Harvard, and Stanford in the United States and Oxford in the United Kingdom are implementing it. True


16-At Cisco, e-learning helped reduce employee training time and costs by almost 25 percent. True


17-One disadvantage of e-learning is the lower content retention rate compared to traditional in-person training. True


18-An important advantage of e-learning is that it can provide a fear-free and privacyprotected environment in which students can put forth any idea without fear of looking stupid. True


19-A drawback of e-learning is that no online course can deliver real-time information and knowledge in the way a "live" instructor can. True


20-Unlike educational institutions, only a small number of business organizations are using e-learning on a large scale. True


21-The dynamic approach to publications personalizes content in real time and transmits it on the fly in the format best suited to the user's location, tastes, and preferences. This approach also is called just-in-time (JIT). True


22-One of the seven principles for building effective blogs is to think of a blog as a database instead of a newspaper-like collection of posts. True


23-Senior executives and companies are using the blogosphere to build trust-based relationships, polish corporate reputations, promote social causes, and accomplish other professional goals. True


24-Knowledge portals are single-point-of-access software systems intended to external use only provide easy and timely access to knowledge and to support communities of knowledge workers who share common goals. True


25-P2P signifies a shift in peer-networking emphasis from hardware to applications because easier configuration and control over applications enable even non—technical people to join the user community. True


26-________ are a popular online publishing technology for creating a Web page that can be edited by anyone with a standard Web browser. P2P




27-All of the following are examples of e-government EXCEPT: a state purchasing officer places an online order for office supplies from an ecatalog sent to her by a national office supply store.

a company sells army and navy surplus supplies at auction over the Internet.

an unemployed worker consults a Web site operated by the state employment department to learn about job openings in his city.

a contractor submits an application for a building permit using a city hall Web site.

an employee at the Chamber of Commerce gets local demographic data from a U.S. Census site.

a driver applies for and pays for the renewal of his auto tag online.

28-An example of G2C is: a road contractor uses the Internet to submit a closed bid on a paving contract.

a regional hospital conducts an online reverse auction for cleaning supplies.

29-Chaplin reports quarterly sales revenue from his business to city hall over the Internet. He pays his local business tax with a credit card. This is an example of: e-government

G2C e-commerce


G2B e-commerce

30-A government agency uses an online reverse auction to satisfy the tendering system requirements specified by law. This is an example of: e-Procurement

G2B e-commerce

G2C e-commerce


31-Government-to-employee applications can lead to significant efficiency improvements for all of the reasons EXCEPT: Many military Most government employees are stationed employees use in remote locations that handheld digital

Governments employ Employees of federal and large numbers of people state governments often that need to be paid and work in a variety of

are best served via the Internet.



geographic locations.

32-All of the following are problems in implementing e-Government EXCEPT: it is difficult to protect personal data collected through an eGovernment site.

businesses have been transformation is more receptive to typically very G2B than slow individuals to G2C.

the technology needed to implement stage 6 of the Deloitte transformation process does not exist yet.

33-One of the most important issues in implementing e-government is: providing for secure its adoption and payments. usage by citizens.

the use of encryption and digital signatures.

designing feature-rich Web sites.

34-All of the following are advantages of e-learning EXCEPT: it costs less to deliver education college professors are online than in a traditional anxious to develop new classroom. online courses.

knowledge retention is higher.

learning time is reduced.

35-All of the following are potential drawbacks of e-learning EXCEPT: assessment issues remain to be resolved.

knowledge retention is lower than in traditional classrooms.

protecting the intellectual instructors must property of content be retrained. developers.

36-Most universities use e-learning: exclusively in as a supplementary reaching students who channel to traditional couldn't otherwise classrooms. attend classes.

only when forced by administrators to use it as a way to recruit distant students or reduce costs.

as a total replacement for traditional classrooms.

37-The business forces that are driving the transition from traditional education to online learning are all of the following EXCEPT: limited supply of faculty with

competition and cost




specialized expertise.



38-Which of the following is an example of edutainment? Two or more students sharing music over the Internet.

An online science fiction game whose object is to blast as many aliens as possible in a 60 second round.

A community college providing an online college course on digital media.

An online game that uses colorful characters to teach young children about numbers.

39-One of the facilitators of e-learning is ________ technology such as wikipedia.org. Macromedia



Web 2.0

40-________ is the electronic delivery of newspapers, magazines, books, videos, music, and other digitizable information over the Internet. Blogging

Social networking

Online publishing


41-More and more people are willing to pay for digital music, as shown by the success of ________. Napster

Apple's iTunes



42-________ is commonly used to broadcast public lectures and e-seminars, promote the work of new or unknown musicians, and broadcast international entertainment activities. Podcasting


Dynamic publishing

File sharing

43-A podcast is distinguished from other digital audio formats by:

its use of unpaid subscriptions.

the iPod its lack of hardware proprietary required to hear content. it.

its ability to be downloaded automatically, using software capable of reading feed formats such as RSS.

44-The exclusively online publication of Stephen King's e-book Riding the Bullet in March 2000: as disrupted by hackers who breached security, then distributed free copies of the book.

was an unqualified success and established electronic publishing as a legitimate competitor for traditional publishers.

produced very few sales.

was a failure because the cost of the book was too high.

45-A type of e-book referred to as the ________ is a truly multimedia, online-only book that has hyperlinks, three-dimensional text and display, graphics, audio, and video. It supports nonlinear exploration of topics. download

Rubics-cube hyperlink online reference book model. book

interactive, build-your-own decision book

46-The primary advantage that e-books offer publishers is: the ability to the ease of updating reach many books in real-time. readers.

lower production, marketing, and delivery costs.

the ease of customizing textbooks and trade books.

47-Which of the following statements about blogs is not true? Blogs became very popular after the September 11, 2001 terrorist attacks when people were looking for as many sources of information as possible and for personal connections to the tragedy.

The most common types of Blogs are limited to blogs are one-way professional communication. blogs,

A blog is a personal Web site, open to the public, in which the owner expresses his or her feelings or opinions.

48-Risks in corporate blogging include all of the following EXCEPT: the risk of disciplinary action against abusive bloggers.

the risk of revealing trade secrets.

the risk of lawsuits

the risk making statements that are or could be construed as libel or defamation.

49-A major purpose of an organizational knowledge base is to support and allow ________.

organizational capital

responsible blogging

knowledge sharing


50-The tasks of KM include each of the following EXCEPT: enhancing a knowledge environment in order to conduct more effective knowledge creation, transfer, and use.

managing knowledge as an asset so as to increase the effective use of knowledge assets over time.

creating knowledge restricting repositories where knowledge access to knowledge can be prevent its transfer stored and retrieved between individuals. easily.

51-Knowledge is of limited value if: company databases are not accessible to decision makers.

users contribute their it is not own specialized content. shared.

companies protect it to maintain competitive advantage.

52-________ involves using various computer-based tools and techniques to analyze transaction data and generate new ideas. Knowledge management Knowledge capture Knowledge classification Knowledge creation

53-Knowledge generated in e-business contributes to the enhancement of three core operating processes, which include all of the following EXCEPT: customer relationship management

supply chain management

product development management

project management

54-Customer-to-customer (C2C) e-commerce is conducted in various ways on the Internet, but the best-known C2C activities are: C2C exchanges

C2C auctions

Personal services

Classified ads

55-P2P systems have all of the following key characteristics EXCEPT: They provide for real-time They support crossaccess to other users networking protocols such through techniques such as SOAP or XML-RPC, as instant messaging and which enables a program

The users' computers can act as both clients and

The overall system is well integrated, but lacks tools for easy creation of content or

multichannel on one computer to collaboration applications. execute a program on a server computer.


for adding functionalities.

Chapter 9 Mobile Computing and Commerce 1-Using wireless technologies, one can create EC applications that are not available with wireline systems. True


2-Mobile computing refers to a computing paradigm designed for workers who travel outside the boundaries of their organizations or for anyone on the move. True


3-The two solutions that were necessary for mobile wireless computing to be feasible were computers that were small enough to be carried easily and long-life batteries. True


4-A laptop or notebook computer can become wireless with the addition of a cellular chip. True


5-Overall, PDA sales dropped in the mid-2000 because PDAs lacked features beyond personal information management. True


6-The primary application of Blackberry is instant messaging. True


7-Hardware and software designers need to consider the special requirements of mobile devices such as small screens, reduced memory, limited bandwidth, and restricted input capabilities. True


8-A Web server may need two versions of the same Web page–a normal page with full graphics for desktop computers and a mobile page for PDAs and smartphones–and a way to distinguish between devices requesting the Web page. True


9-The infrastructure to support mobile commerce is inexpensive and relatively simple to put in place. True


10-Common standards for various mobile devices simplify the development of software applications for wireless devices. True


11-Small handheld computing devices use a variety of interface approaches including a touch screen, mini-joystick, jog dial, and thumb wheel. True


12-The Wireless Application Protocol, or WAP, is a suite of network protocols designed to enable different kinds of wireless devices to access WAP-readable files on an Internetconnected Web server. True


13-The WAP gateway is a server that is responsible for translating information requests from the device into an HTTP request that the Web server can understand. True


14-Micropayments for small-purchase amounts of less than $10 have become widespread in EC, in part because of the widespread use of all types of mobile devices. True


15-Increased use of voice-support services exploits the built-in audio capabilities of many mobile devices and reduces their dependence on unsatisfactory input solutions, such as handwriting recognition, keypads, or virtual touch-screen keyboards. True


16-The highest level of voice support services is a voice portal, which is a Web site with an audio interface that can be accessed through a telephone call. True


17-WiFi is a set of telecommunications standards that enables wireless devices to communicate with each other over short distances, but which suffers from interference and security problems. True


18-The most popular Wi-Fi standard is 802.11b, which is inexpensive and offers sufficient speed for most devices, but has interference problems. True


19-A common type of personal area network (PAN) is Bluetooth-enabled headsets that people use with their cell phones. True


20-Increasingly, 802.11b is being used in commercial environments where cost is not a major issue and where laptop computers can take advantage of the 54 Mbps transfer rate. True


21-WiMax is an IEEE 802.16 wireless standard for making broadband network access widely available for data and voice over a medium-sized area, and whose impact on ecommerce is still unclear. True


22-Even though micro-payment technology has wide-ranging applications, such as making payments to parking garages and public transportation, two factors limiting the success of micro-payment applications are transaction costs and nonpayment risks. True


23-The two greatest opportunities in B2B mobile commerce are to use wireless communication to share information along the supply chain and to make electronic payments. True


24-In Las Vegas, the Luxor pre-registers guests when their airplane lands and they turn on their cell phones. Also, the hotel can determine when guests leave the hotel, luring them back to gamble with mobile incentives and pitches. This is an example of Global Positioning Systems (GPS). True


25-Several key ethical issues in m-commerce include isolation, loss of privacy, and potential health damage from cellular radio frequency emissions. True


26-M-commerce transactions and activities require ________ and ________. hardware and software infrastructures; infrastructure support

cell phones; smartphones; portable computers switches

27-Infrastructures that support the wireless connection are:

wired networks; access points

PDAs, smartphones, and portable computers.

WAP gateways, GPS locators, and GPS satellites.

network access points, mobile web servers, mobile communications server switches, devices, and and cellular transmitters and microbrowsers. receivers.

28-Components of a wireless infrastructure that support delivery of services over a wireless connection are: WAP gateways, GPS locators, and GPS satellites.

network access points, mobile PDAs, web servers, mobile communications server switches, smartphones, and devices, and cellular transmitters, and portable computers. microbrowsers. receivers.

29-Characteristics of mobile devices that create special requirements that hardware and software designers need to anticipate when designing mobile computing systems include all of the following EXCEPT: restricted input capabilities

small screens

reduced memory

broad bandwidth

30-The exchange of updated information with other computing devices is called: data transferring




31-A suite of network protocols designed to enable different kinds of wireless devices is called: a mobile application user interface.

Wireless Application Protocol.

wireless middleware.

a mobile operating system.

32-The application logic in a handheld PDA, smart phone, Palm or Wintel notebook is called: a mobile application user interface.

wireless middleware.

a mobile operating system.

Wireless Application Protocol.

33-________ enables the determination of the location of an enabled device. WAP




34-Rick sends a message from a delayed flight to his friend on her cell phone that he will be arriving late. The service that allows the sending and receiving of such short text messages on mobile phones is called: LOL




35-Micropayments are electronic payments: that are less than $100.00.

that are less than $1.00.

that are less than $10.00.

from a mobile device.

36-A ________ is suitable for mobile users who need to make very short-range device-todevice wireless connections within a small space, such as a single room, and most commonly with Bluetooth. wireless area network

local area network

Wi-Fi area network

personal area network

37-Most WLANs run on a telecommunications standard known as ________, which is more commonly called ________. IEEE 802.11; Bluetooth

WLAN; hotspot

IEEE 802.16; WiMax

IEEE 802.11; Wi-Fi

38-The IEEE standard ________ offers bandwidth transfer rates of 200 to 540 Mbps, which makes it impractical because it exceeds the limits of most broadband connections used by homes and small businesses. 802.11b




39-All of the following about wireless wide area networks (WWAN) are true EXCEPT:

Most WWANs are cellular phone networks.

When a device is turned on, a SIM card inside the device identifies itself to the WWAN.

At the center of each cell is a base station transceiver or cell tower that is used to send and receive signals to and from mobile devices operating within the cell.

The single WWAN network standard insures compatibility of handsets within and between countries.

40-The major attributes that enable development of new applications that are possible only in a mobile environment include all of the following EXCEPT: Ubiquity




41-The development of m-commerce is being driven by the following technological, business, social, and economic factors EXCEPT: The improved price/performance of mobile services.

The widespread availability of more powerful wireless devices.

The growth of a handset culture and mobile workforce.

The transition to a manufacturing economy.

42-As in e-commerce, m-commerce B2C applications are concentrated in each of the following areas EXCEPT: retail shopping for products and services


targeted advertising

providing content for a fee through mobile portals

43-The major enterprise mobile applications are all of the following EXCEPT: logistics and supply chain

e-mail and cell phone research and contacts development

customer relations and sales force automation

44-By enabling sales force employees to record orders in real time, the organization benefits through each of the following EXCEPT: lower clerical and administrative overhead.

more extensive collaboration fewer data improved manufacturing and sharing of customer entry errors. and delivery scheduling, leads.

45-Mobile access supports the two functions of sales force mobilization and field service, which extends the reach of ________ to both employees and business partners on a 24/7 basis to any place where recipients are located. customer relationship management

vendor management

supply chain management

inventory management

46-One way to share information with supply chain partners is wireless ________, which is the science of measuring physical phenomena such as temperature, volume, or an on/off condition at a remote point and transmitting the value to a distant recorder or observer. RFID




47-WiMax and 3G wireless mobile technologies offer telemedicine application opportunities that include all of the following EXCEPT: Real-time consultation between a patient in one location and a medical specialist in another.

Wearable heart monitors linked to a cell phone can automatically contact doctors or family members at the first sign of health problems.

Prescriptions can be transferred electronically to the appropriate pharmacy for a no-wait pick-up by the patient.

Reduced threat of malpractice suits because there is no hands-on interaction between the remote physician and the patient.

48-All of the following are barriers to location-based m-commerce EXCEPT: Consumers see constant location data transmissions as a violation of privacy.

There are presently not Wireless enough location-based bandwidth is systems to make this a limited. viable technology.

The accuracy of location technologies is often less than consumers expect.

49-The services provided through location-based m-commerce focus on key factors which include all of the following EXCEPT: Tracking, or Timing, or determining Navigation, or plotting Geocaching, or monitoring the the precise time at a a route from one determining the movement of a person location to another. topography of an area. specific location or thing.

50-A(n) ________ is a computer system capable of integrating, storing, editing, analyzing, sharing, and displaying spatial information. geographical information system on-star system l-commerce system global positioning system

51-You are walking near a coffee shop and suddenly your cell phone beeps with a message: "Come inside and get a free biscotti with any purchase." This is an example of:

location-based advertising


customer relationship management

permission marketing

52-________ refers to the integration of computers and wireless communications in order to improve information flow. Remote telemetry




53-Many experts believe that the next major step in the evolution of computing will be ________ in which almost every object will have processing power and a wired or wireless connection to a network. universal computing

mobile computing

persistent computing

pervasive computing

54-All of the following about RFID are true EXCEPT: An RFID tag can hold 20 times the amount of information a bar code can hold, and the tag can be read through cardboard, wood, and plastic at a range of up to 100 feet.

An RFID tag includes an antenna and a chip with information about the item.

An RFID tag remains inactive until radio frequency energy from the tag's radio transmitter hits its antenna, giving the chip enough power to emit a 96-bit string of information.

An RFID reader contains a radio transmitter and receiver.

55-One initiative underway that could lead to widespread support for the introduction of RFID is the ________, which identifies the manufacturer, producer, version, and serial number of each item and does not require line-of-sight contact to be read. Smart Product Network Electronic Product Code Universal Product Code Sensor Network

Chapter 10 Dynamic Trading 1-The Internet provides an infrastructure for executing auctions with many more participating sellers and buyers than with offline auctions, but administrative costs are higher. True


2-In some types of auctions, sellers offer product; and in other types of auctions, buyers post their product needs. True


3-Dynamic pricing refers to a transaction in which the price is not fixed, but fluctuates based on current supply-and-demand relationships. True


4-Reverse auctions have two major purposes: liquidation and market efficiency. True


5-B2B reverse auctions are gaining popularity as an online mechanism for buying goods and services. True


6-A popular type of auction model where there is one buyer and many potential sellers is the "name-your price" model that was pioneered by eBay.com. True


7-An auction that takes place between sellers and buyers in one industry or for one commodity is called a vertical auction because activity goes up and down the supply chain in a single industry, rather than horizontally between members of supply chains in different industries. True


8-Specialized sites for vertical auctions are referred to as auction vortals. True


9-Through e-auctions, sellers can gain more customer dollars by offering items directly rather than through an expensive intermediary or by using an expensive physical auction.



10-A major benefit of e-auctions is the reduced rate of fraud because of the openness of the transaction. True


11-The "name-your-own-price" model is based on the fundamental concept of the downward-sloping supply curve in which prices vary based on supply. True


12-Entering a high bid without ever planning to pay for the auction item is called sniping. True


13-In addition to auctions, dynamic prices can be determined by online negotiation, which is the back-and-forth process of bargaining until a buyer and seller reach a mutually agreeable price. True


14-Barter agents are software that can support the back-and-forth process of online negotiation. True


15-Double-auction markets tend to generate competitive outcomes because a double auction is an interactive market in which both buyers and sellers are competitive. True


16-Prices paid in online auctions are lower when auctions are an alternative selling channel rather than an exclusive selling arrangement. True


17-Negotiating prices transfers the burden of determining prices to the market itself so the resulting negotiated prices will always be fair and effective. True


18-Bid shielding is a type of e-auction fraud where sellers place phantom bidders to bid up the price of items they are selling and hide (shield) low bids by actual potential buyers. True


19-Specialized authentication services are very effective and widely used to determine whether an item is genuine and described correctly as a way to protect against counterfeit products. True


20-Third-party escrow services are used for products valued at more than $200 to protect both the buyer and seller when either the buyer or seller feels the need for additional security. True


21-When a company decides to use auctions as a sales channel, one of the strategic issues in B2B is the potential conflict with existing distributors and distribution channels. Therefore, some companies use auctions only to liquidate obsolete, used, refurbished, or damaged products. True


22-The process of building auction applications is easy because of intelligent agents and other building tools. True


23-WineryExchange successfully auctioned grapes to wineries, which ended the tradition of sales being based on established relationships between grape growers and wineries. True


24-Privacy is one of the benefits of mobile auctions because the Internet cell phone is more private than a PC. False


25-Auctions may be used as a strategic tool by both online and offline companies.This type of strategic alliance will be very popular due to its win win possibilities. False


26-Auctions are all of the following EXCEPT: They are a marketing channel.

They are an established method They are suitable for They are a market of commerce for generations. most consumer goods. mechanism.

27-Dynamic pricing refers to : prices that are determined prices that are regulated by government agencies. by market forces.

prices that prices that are maximize revenue. negotiated.

28-________ work best with many buyers and many sellers. Forward auctions

Reverse auctions

Dynamic exchanges


29-The ________ auction model is popular in B2B. one buyer, many potential one-buyer, onesellers seller

one seller, many potential many buyers, many buyers sellers

30-Two purposes of a type of ________ auctions are liquidation and market efficiency. one buyer, many potential many buyers, many sellers sellers

one-buyer, one- one seller, many potential seller buyers

31-Reverse auctions are a type of ________ auctions. one-buyer, one- one buyer, many potential many buyers, many seller sellers sellers

one seller, many potential buyers

32-The "name-your own-price" model pioneered by Priceline.com is a type of ________ auction. many buyers, many sellers

one buyer, many potential one seller, many potential one-buyer, onebuyers seller sellers

33-Auctions done in exchanges or double auctions are ________ auctions. many buyers, many sellers

one-buyer, one- one seller, many potential one buyer, many potential seller buyers sellers

34-A(n) ________ takes place between sellers and buyers in one industry or for one commodity, such as flowers, cars, or cattle. vertical auction


open auction

negotiation vortal

35-All of the following are potential benefits from auctions to sellers EXCEPT: sellers can liquidate large sellers receive valuable auctions can broaden the sellers are always quantities of obsolete price sensitivity customer base and anonymous. items very quickly. information. reduce cycle time.

36-In electronic auctions, near-perfect market information is available about prices, products, current supply and demand, and so on. This feature provides benefits to ________. sellers


buyers and sellers

companies and individuals

37-Benefits of electronics auctions (e-auctions) to sellers include all of the following EXCEPT: Anonymity

Lower transaction and administrative costs

Larger reach and increased revenues

Removal of expensive intermediaries

38-________ refers to the tendency of customers to stay at Web sites longer and come back more often. Loyalty

Frequent purchase

High repeat


39-Limitations of e-auctions include all of the following EXCEPT: Risk of fraud

Higher order fulfillment costs

Long cycle time

Dynamic pricing

40-Research has shown that e-commerce sites that use an auction model tend to: reach critical mass more quickly become liquid. than catalog-order-based.

fail more often than reach critical mass more other models. slowly than other models.

41-The first step in the auction process is: preparing the bids.

arranging financing.

searching and comparing.

registration and participants' profiles.

42-Jackie uses a software system to place bids automatically on her behalf until her predetermined maximum price is reached. The software bids in such a way as to minimize the final bid. This is referred to as: sniping.

bidding agents.

proxy bidding.

pricing agents.

43-Compared to competitive markets, auction prices are often ________ when there are multiple bidders. the same




44-Compared to competitive markets, auction prices are often ________ when there are very few bidders. lower



the same

45-The most serious disadvantage of e-auctions is: logistics.

payment delays.

unreliable auction software.

the risk of fraud.

46-The practice by sellers of having associates place fake bids in an auction as a way to drive up the selling price is called: bid shielding.

bid fixing.



47-Bidders sometimes use phantom bidders to drive bid prices up rapidly at the beginning of an auction, thus discouraging bidding from legitimate bidders. At the last minute, the phantom bidders pull out, which awards the item to a very low bidding customer. This practice is called: shilling.


bid fixing.

bid shielding.

48-John wants to know if the first edition novel he just purchased through an e-auction is actually a first edition. The auction host helps him locate an expert that will tell him whether the novel is a genuine first edition or a fake. This is an example of: certification.




49-A major shortcoming with authentication services is: it is impossible to tell whether many items are reproductions or genuine.

dishonest authenticators are the primary sources of fraud on the Internet.

most auction sites forbid the use of authentication services.

two different authenticators may come up with different opinions regarding the authenticity and description of a given item.

50-Many companies use intermediaries or trading assistants instead of implementing eauctions themselves for each of the following reasons EXCEPT: To bring many Costs of auction intermediaries or To avoid tax The company name is more buyers to the assistants are less than the costs of and legal not widely recognized. auction. physical auctions. fees.

51-Each of the following is one of the three major categories of auction rules EXCEPT:

timing rules

clearing rules

bidding rules

information-revelation rules.

52-Each of the following is true about auction rules EXCEPT: Rules eliminate conflicts with existing distributors and distribution channels.

Rules are intended to Auction rules vary from smooth the auction country to country due to mechanism and to legal considerations. prevent fraud.

The success of auctions depends on complying with auction rules.

53-The process of building auction applications is complex for all of the following reasons EXCEPT: auctions must be integrated with the back-end offices.

the number of auctions must be integrated with auctions must needed features can the legacy systems of provide payment be very large. participating companies. systems.

54-Many auction sites are implementing ________ because of the significant increase in the number of users who browse the Internet wirelessly. m-commerce applications

instant message notification



55-The limitations of mobile auctions are all of the following EXCEPT: Internet-enabled Internet cell phones have limited phones are less private than a PC. memory capacity

Wireless systems are not as safe as wireline ones.

Portable devices are small and may have a problem showing pictures of auction items.

Chapter 11 E-Commerce Security 1-Fraud refers to a business activity that relies on force or threats to deprive a person or company of property or other assets. True


2-The trend in online crimes shows that most new scammers and other con artists are not computer geniuses.



3-Identity theft has become the primary concern of online shoppers. True


4-Defending against online cons and compensating for the damages caused by identity thieves have significantly increased the costs of EC. True


5-To minimize the risk of fraud from phishing and crimeware, EC retailers need to authenticate the buyer. True


6-An EC security strategy consists of firewalls and other types of technology to prevent and detect unauthorized use of the organization's brand, identity, Web site, e-mail, information, or other asset. True


7-Information assurance broadly refers to the protection of information systems against unauthorized access to information, unauthorized modification of information, and denial of service to authorized users. True


8-The EC industry ranks security over convenience. So the EC industry strives to enforce safeguards, such as passwords for credit card transactions, that make online shopping safer even if those safeguards make it more inconvenient for customers. True


9-Credit card issuers want to cooperate and share leads on criminal activity with each other and law enforcement even though prosecution with an uncertain outcome.



10-Most U.S. Web hosting providers log all activity so, in most cases, they can identify the source IP address and source ISP with timestamps and other identifying information. True


11-Requiring stronger EC standards and information sharing by the credit card companies would not fix the security problems facing online retailers and shoppers. True


12-Spammers use zombie computers to distribute spam because it is both cheaper and less risky. True


13-According to the Mitre Corporation's list of Common Vulnerabilities and Exposures, two of the top five reported vulnerabilities were within Web applications. True


14-The legal standard of due care requires that a company take reasonable care to defend against risks affecting its EC business and online transactions. True


15-Because of the lack of source authentication and data integrity checking in DNS operations, Internet services are vulnerable to attacks. True


16-Experts believe that a strict e-business risk management program that was rigorously managed could not have prevented many of the data breaches. True


17-EC security programs have a life cycle during which their EC security requirements must be evaluated and adjusted annually. True


18-According to the CIA security triad, the success and security of EC depends on the confidentiality, integrity, and accessibility of information and the business Web site. True


19-Nonrepudiation is closely associated with authentication and assures that an online customer or trading partner cannot falsely deny their purchase or transaction. True


20-The FTC, SEC and other government agencies cannot impose harsh penalties on companies whose confidential data has been breached unless a company employee caused the breach. True


21-Phishing attacks rely on social engineering, which is a nontechnical attack that uses something to trick users into revealing information or performing an action that compromises a computer or network. True


22-The time-to-exploitation, which is the elapsed time between when a vulnerability is discovered and the time it is exploited, of most sophisticated spyware and worms has decreased from several months to a few weeks. True


23-Unlike denial of service (DOS) attacks, botnet attacks are less dangerous because they cannot disrupt a web site or EC application. True


24-The ability of a biometric system to identify a person depends on the existence of database of enrolled users that is searched for a match based on the person's biometric trait. False


25-Virtual private networks (VPNs) are a special category of software that can monitor activity across a network or on a host computer, watch for suspicious activity, and take automated action based on what it sees. True


26-The incidence of online fraud and identify theft has increased for each of the following reasons except: New effective phishing Information is today's scams and schemes most valuable form of being carried out by international currency. computer experts.

Scammers outsourcing work to programmers to seize control of computers or wireless networks.

Growth in EC sales and the number of shoppers with higher incomes.

27-Cyber cons have a negative effect on EC because con artists have gone low-tech.

companies cannot expand their e-business to other countries with underdeveloped legal systems.

a majority of potential customers do not shop online because they are too afraid of fraud to trust online merchants.

defending against these cons and compensating for damages significantly increase the costs of EC.

28-The U.S. agencies dedicated to eliminating fraud resulting from phishing and crimeware are: The High-Tech Crime The Group of Network, AntiEight, VeriSign, Phishing Working and NameProtect. Group, and Internet Research Lab.

The High-Tech Crime Network, Anti-Phishing Working Group, and Federal Trade Commission.

The Computer Security Institute, High-Tech Crime Network, and Anti-Phishing Working Group.

29-________ is a crimeware technique used to steal the identity of target companies to get the identities of their customers.

Social engineering.




30-Where do a huge majority, possibly as high as 95 percent, of hackers reside? Turkey, China, Romania, or Russia, India, Germany, or Argentina. Brazil.

In the G8 countries.

In South America.

31-The key reasons why EC criminals cannot be stopped include each of the following except: Lack of cooperation from credit card issuers and foreign ISPs.

Strong EC security makes Sophisticated hackers online shopping use browsers to crack inconvenient and into Web sites. demanding on customers.

Online shoppers do not take necessary precautions to avoid becoming a victim.

32-It is currently known that if a front-end application such as a Web site is effectively secured, then

the data itself is secured by firewalls.

the data itself is secure because web applications are not targeted by attackers.

the data itself may not be secure because the application may not function as planned.

the data itself may not be secure because backend databases may not function as planned.

33-A vulnerability is the estimated cost, loss, is a or damage that can result if software a threat exploits a bug. vulnerability.

is a weakness in software or is the probability other mechanisms that a hacker that a weakness will can use directly to gain access to be known and used. a system or network.

34-The underlying reasons why a comprehensive EC security strategy is needed include all of the following except: Managers treating EC security as a process.

The Internet was designed The shift for maximum efficiency toward profitwithout regard for its motivated security or users with crimes. malicious intent.

Many companies fail to implement basic IT security management best practices, business continuity plans, and disaster recovery plans.

35-The protection of information systems against unauthorized access to or modification of information that is stored, processed, or being sent over a network is referred to as ________. Information defense. Information security triad. Information integrity. Information assurance.

36-The success and security of EC depends on the ________ of information and the business Web site. authentication, authorization, and nonrepudiation

encryption, functionality, and privacy

quality, confidentiality, integrity, reliability, and and availability speed

37-The basic security concepts relating to customers and other users are: authorization, nonrepudiation, and information assurance.

information assurance, authentication, confidentiality, and authorization, and authentication. nonrepudiation.

confidentiality, integrity, and availability.

38-Digital signatures or digital certificates: are used to validate the sender and time stamp of the transaction so it cannot be later claimed that the transaction was unauthorized or invalid.

have been compromised by phishers and spammers.

provide complete a confidence that the and transactions are secure. b

39-The most cost-effective approach to EC security is to develop and implement a strategy that requires digital signatures or digital certificates for all transactions.

depends on the trust and confidence of customers.

proactively meets regulatory, financial, marketing and operational requirements.

protects against unauthorized transactions and overrides of accounting controls.

40-To be effective, an acceptable use policy (AUP) needs to specify rules for

to inform all users of their

to be written by to be incorporated

firewalls, access control responsibilities when using the company's into business lists, monitoring, and company networks, computer legal department. projects and intrusion detection proposals. equipment, wireless devices, and systems. customer data.

41-In 2005, human error was responsible for almost ________ percent information security breaches in organizations. 40




42-Which of the following statements about hardware and software security defenses is false? After the EC security program and policies are defined and risk assessment completed, then the software and hardware needed to support and enforce them can be put in place.

Hardware and software security defenses protect against irresponsible business practices or corrupt management.

If firewalls and There is no antivirus software are single hardware not upgraded and or software monitored solution for all constantly, they will companies. not remain useful.

43-Social engineering attacks are: no longer considered to be serious Internet threats due to the increased security of MySpace, LinkedIn, and YouTube.

take advantage of Web are a combination 2.0 applications like of technical and social networking sites, nontechnical blogs, wikis and RSS attacks. feeds.

an example of technical attacks requiring software or systems knowledge.

44-A technique known as web page hijacking downloads what appears to be an "important document," but which contains a trojan, a program that gives the sender control of the infected machine.

45-A botnet is:

enables a malicious Web master to displace the pages of an EC Web site in the Search Engine Results Pages (SERPS) to redirect customers to another site.

causes a high enables online volume of gambling that are search engine actually fronts for traffic similar to international money a denial of laundering operations. service attack.

a piece of software code that inserts itself into a host or operating system to launch DOS attacks.

a collection of a few hundred hijacked Internet computers that have been set up to forward traffic, including spam and viruses, to other computers on the Internet.

a piece of code in a worm that spreads rapidly and exploits some known vulnerability.

a coordinated network of computers that can scan for and compromise other computers and launch DOS attacks.

46-Which technologies are designed and used to secure EC communications across a network? PINs, cryptocards, and point-of-sale systems.

Plastic cards with magnetic strips, intrusion detection systems, and progressive tokens.

AUPs, ACLs, and network login IDs.

Access control lists, tokens, passwords, and biometric systems.

47-Public key infrastructure (PKI) is an authentication method that encrypts and decrypts large amounts of data effectively.

that is based on the Data Encryption Standard, which is the standard symmetric encryption algorithm supported by U.S. government agencies.

that uses encryption keys ranging from 64 bits to 128 bits.

that has become the cornerstone for secure e-payments and intranet applications.

48-Secure Socket Layer (SSL), which is also known as Transport Layer Security (TLS): is designed to handle all steps in the validation of credit card numbers.

has been replaced by certificate authorities.

is one of the major generally accepted protocols for securing ecommerce used by Microsoft and Netscape.

was invented by Microsoft to use standard certificates for authentication and data encryption to ensure privacy or confidentiality.

49-Access to a network ought to be based on: the policy of least privilege where access to network resources are blocked and permitted only when needed to conduct business.

the policy of role-specific security the policy of need-toacceptable use protocols where know where access where access is access is limited by a by all non-employees restricted by the user's level of trust. is blocked. firewall.

50-Which of the following does not correctly describe what firewalls protect against? Some programs have bugs or special features that create application backdoors, which allowing for remote access.

Spammers often use SMTP session hijacking to redirect email through the SMTP server of an unsuspecting host, which helps hide their identity.

Remote logins occur when an unauthorized users connects to a PC and gains control of it.

Macros are the electronic equivalent of junk mail.

51-Firewalls that filter requests from the Internet to a private network based on the IP address of the computer sending or receiving those requests are called: packet-filtering routers.

application-level proxies.

bastion gateways.

IP blockers.

52-All of the following are important security functions of proxy servers except: They improve network performance.

They hide the IP addresses They help control of a company's internal outbound traffic to a computers. network.

They help control inbound traffic to a network.

53-The advantages of virtual private networks (VPN) for data communications include all of the following except: They can reduce communication costs dramatically because VPN equipment is cheaper than other remote solutions.

They are less expensive than private leased lines because they use the public Internet to carry information.

They ensure the confidentiality and integrity of the data transmitted over the Internet without requiring encyption.

Remote users can use broadband connections rather than make long distance calls to access an organization's private network.

54-A host-based intrusion detection system (IDS): Resides on the server that is Consists of information system resources– being monitored where it can detect whether critical firewalls, routers, Web or security-related files have servers, database servers, and files that been tampered with or look like production whether a user has attempted to access files that systems, but do no real he or she is not authorized to work.

Can perform certain actions when an attack occurs, such as terminating network connections based on security policies.

Uses rules to analyze suspicious activity at the perimeter of a network or at key locations in the network


55-In the United States, which the federal laws place legal limits on monitoring activity? The Wiretap Act and CFAA

The Wiretap Act and the Pen Register, Trap, and Trace Devices statute

The Computer Fraud and Abuse Act (CFAA) and the First Amendment.


Chapter 12 Electronic Payment Systems 1-E-payment systems that require the payer to install specialized security software have proven more likely to succeed. True


2-The success of an e-payment method depends on its interoperability with existing enterprise systems and applications. True


3-To succeed, special e-payment methods, such as e-cash, have to maintain anonymity. True


4-E-payment methods that can address the lower or higher end of the price continuum is unlikely to be widely accepted because of cost and security issues. True


5-Credit cards and charge cards are e payment instruments that allow the holder to make purchases up to a fixed limit and charges interest each month on unpaid balances. True


6-In the settlement process, the systems must determine whether a buyer's card is active and whether the cardholder has sufficient funds available for the purchase.



7-With a debit card, the money for a purchased item comes directly out of the holder's checking account with the actual transfer of funds from the holder's account to the merchant's taking place within one to two days. True


8-The processing of card payments has two major phases: identification and settlement. True


9-In the authorization process, the systems determines whether a buyer's card is active and the customer has sufficient available credit line or funds. True


10-For a given type of payment card and processing system, the processes and participants are essentially the same for off-line (card present) and online (card not present) purchases. True


11-CyberSource and VeriSign are payment processing services that provide connectivity among merchants, customers, and financial networks that enable authorization and payments. True


12-In the online world, merchants are not held liable for fraudulent transactions. True


13-Recent surveys by CyberSource indicate that fraudulent card transactions are a growing problem for online merchants in spite of their increasing efforts to combat fraud despite improved anti-fraud measures. True


14-Because of their visibility and large sales volumes, larger firms were more susceptible to fraud than smaller firms were. True


15-One problem with the Address Verification System (AVS) for fraud prevention is the number of false positives, meaning that the merchant rejects a valid order. One reason for these rejects is simply that cardholders make mistakes in inputting their addresses or zip codes. True


16-One impact of anti-fraud tools is that merchants are rejecting a significant number of both valid and invalid orders due to suspicion of fraud. True


17-With virtual credit cards, the issuer must create a new credit card number for every purchase. True


18-In most cases, smart cards are more secure than credit cards and can be extended with other payment services. In the retail arena, many of these services are aimed at those establishments where payments are usually made in cash and speed and convenience are important. True


19-Stored-value cards are being marketed heavily to the those who do not have credit cards or do not have bank accounts, specifically people with low incomes, young adults, seniors, immigrants, minorities, and others. True


20-Regardless of the vendor's point of view, there is substantial evidence, at least in the offline world, that consumers are not willing to use their credit or debit cards for micropayments under $5 to minimize security risks. True


21-E-checks rely on current business and banking practices and can be used by any sized business that has a checking account, credit card, and debit card. True


22-From the perspective of the billing firm, two advantages of e-billing are the reduction in expenses related to billing and processing payments and the ability for advertising customized to each individual customer. True


23-EIPP is the process by which companies present invoices and make payments to one another. True


24-With letters of credit, credit risk is reduced because payment is accessed via the creditworthiness of the issuing bank. True


25-Research shows that state and local governments are losing more than $100 billion per year in sales tax revenue on items purchased over the Internet. True


26-Factors that come into play in determining whether a particular method of e-payment achieves critical mass include all of the following EXCEPT: the degree of security of the transfer.

interoperability with other full traceability of hardware and software enterprise systems and independence. the buyers. applications

27-A card that draws the payment amount directly from the user's checking account is called a(n): e-payment card.

charge card

credit card.

debit card

28-A payment card that provides the holder with credit to make purchases up to a limit fixed by the card company and charges relatively high interest rates on unpaid balances is the: e-payment card.

charge card.

debit card.

credit card.

29-The process of determining whether a card is active and whether the customer has sufficient funds for the purchase is called: settlement.




30-The transfer of money from the buyer's to the seller's account is called: authorization.




31-________ offer Internet Merchant Accounts, which are special accounts for credit card authorization and payment processing. Payment processing services

Credit card associations

Issuing banks

Acquiring banks

32-________ are financial institutions that provides a customer with a payment card. Acquiring banks

Payment processing services

Issuing banks

Credit card associations

33-________ provide connectivity among merchants, customers, and financial networks enabling authorization and payments is called the: Credit card associations

Payment processing services

Acquiring banks

34-________ are small online payments typically under US$10:

Issuing banks

E-smart payments




35-An advantage of e-checks is that they: operate outside the involve complex contain much more fit current business traditional banking internal processing information then practices, and so require industry. systems. traditional paper checks. little process reengineering.

36-The nationwide batch-oriented electronic funds transfer system that provides for interbank clearing of electronic payments for participating financial institutions is called the: Automated Clearinghouse Network.

electronic bill presentment and payment network.

Receiving Depository Financial Institution

Federal Reserve System.

37-Each of the following are ways to pay bills over the Internet EXCEPT: biller direct.

bill consolidator.

customer service provider.

online banking.

38-From the perspective of the billing firm, all of the following are advantages of e-billing EXCEPT: reduced processing expense.

universal availability.

opportunity for targeted advertising.

improved customer service.

39-From the perspective of the customer, all of the following are advantages of e-billing EXCEPT: greater security than other types of payments.

simplifies and centralizes payment processing.

makes record keeping easier.

lower costs.

40-Characteristics of B2B payments include all of the following EXCEPT: They are more likely to They are much They are significantly They require less involve disputes that larger than payments more complex than rigor and security require significant rework payments by individuals. than B2C payments. by individuals. to resolve.

41-B2B payments are part of a much larger financial supply chain that includes all of the following EXCEPT: payment authorization.

contract administration.


financial reporting.

42-In financial supply chain management, the goal is to optimize all of the following EXCEPT: accounts receivable

the physical supply chain

accounts payable

financial risks

43-Unlike the physical supply chain, ________ characterize the financial supply chains of most companies. greater accuracy




44-The vast majority of B2B payments are: electronic payments.

made using electronic funds transfer (EFT)

made with letters of still made by paper credit. check.

45-Barriers inhibiting B2B electronic payment include all of the following EXCEPT: strict standard formats for remittance information.

a lack of integration of inability of trading partners to send a shortage payment and or receive electronic payments with of IT staff. accounting systems. sufficient remittance information.

46-The process by which companies present invoices and make payments to one another through the Internet is known as: enterprise invoice presentment online accounts payable. and payment.

electronic data interchange.

online accounts receivable.

47-For many firms, presentment and payment processes are all of the following EXCEPT: costly.

time consuming.



48-According to a survey by Credit Research Foundation, the major reasons companies turn to EIPP solutions are all of the following EXCEPT: better customer service for billing and remittance.

elimination of billing disputes

improved data that can lower improved invoice processing costs. cash flow.

49-________ is an EIPP many-to-many model with a third party acting as an intermediary, collecting or aggregating invoices from multiple sellers and payments from multiple buyers. ACH network

Seller direct

Buyer direct


50-Among the forms of online B2B payments, ________ is second only to ACH in terms of frequency of use. letters of credit

purchasing cards


Fedwire, or wire transfer

51-All of the following are advantages of using purchase cards EXCEPT: purchasing departments report productivity gains.

bills are consolidated into a single payment.

improved control.

they are widely accepted in international trade.

52-In global trade, a ________ is a written agreement by a bank to pay the seller, on account of the buyer, a sum of money upon presentation of certain documents. micropayment

letter of credit

bank check

trade card payment

53-All of the following are benefits of letters of credit (LCs) EXCEPT: Payment is assured if all the terms in the LC are complied with.

Credit risk is reduced because payment is accessed via the creditworthiness of the issuing bank.

Political risk is reduced LCs are cheap if the LC is confirmed and easy to by a bank in the seller's establish. country.

54-The current Internet sales tax moratorium in the United States applies to: all retail sales

all B2B

clothing, food, and

all sales made over the Internet if the

made over the Internet.

sales only.

pharmaceuticals only.

seller has no physical presence in the state where the buyer lives.

55-Many B2C and B2B businesses rely on specialized third-party software and services to calculate the taxes associated with a sale because: of the complexities.

they verify shipping addresses.

tax laws rarely change.

of government regulations.

Chapter 13 Order Fulfillment 1-The implementation of most EC applications requires the use of support services. True


2-Amazon.com initially operated as a totally virtual company, but had to add physical warehouses with thousands of employees in order to expedite deliveries and reduce order fulfillment costs. True


3-Both EC and traditional retailing are based on the concept of "pull" operations that begin with an order from a customer. True


4-Order fulfillment involves activities such as providing customers with what they have ordered, delivering orders on time, and providing all related customer services. True


5-Front-office operations are the activities that support fulfillment of orders, such as packing, delivery, accounting, and logistics. True


6-Back-office operations are the operations involved in the efficient and effective flow and storage of goods, services, and related information from point of origin to point of consumption. True


7-The EC order fulfillment process begins when an order is received and verified as being a real order. True


8-In B2C, customers usually validate that they will pay by prepaying using a credit card. True


9-When a customer returns items that have been ordered, the series of activities involved in that return are called return logistics. True


10-The order fulfillment processes for B2B and B2C activities are similar. True


11-The major difference between e-logistics and traditional logistics is that traditional logistics deal with the movement of large amounts of materials to a few destinations. Elogistics shipments typically are small parcels sent to many customers' homes. True


12-The inability to deliver products on time is a typical problem in both off-line and online commerce. True


13-The chance of supply chain problems, such as shipping the wrong items, is lower for EC than for off-line commerce because of more advanced logistics support.



14-Supply chain problems, such as errors in demand forecasting, jeopardize order fulfillment. True


15-Many problems along the EC supply chain stem from two sources: uncertainties in forecasting demand and the need to coordinate several activities, internal units, and business partners. True


16-Uncertainties in delivery time are a major cause of order fulfillment problems. RFID can help by locating shipments in real time to minimize delays and enhance customer service. True


17-The B2C order-taking process can be improved when it is done via EDI, EDI/Internet, the Internet, or an extranet. True


18-B2C fulfillment may be more complex than that of B2B because it has at least six dimensions of complexity rather than only two. True


19-High delivery costs are justified only if there is a high concentration of orders from customers located in close proximity or if the value of the order is large enough. True


20-Delivery-value density is a decision support tool that helps determine whether it is economical to deliver goods to a neighborhood area in one trip. The lower the density value, the better.



21-According to researchers, culture, top management commitment, and technology infrastructure lead to CRM success. True


22-The integration of ERP and CRM must include low-level data synchronization as well as business process integration so that the integrity of business roles can be maintained across systems and workflow tasks can pass between the systems. True


23-Benefits of CRM analytics lead to better customer relations in terms of sales and service, better marketing strategies, lower inventory, and faster delivery. To derive these benefits, it is necessary to properly collect and analyze relevant customer data. True


24-The primary customer-facing applications that support eCRM are self-tracking, FAQs, and self-configuration. True


25-Data mining is an important analytic activity that involves sifting through an immense amount of data to discover previously unknown patterns that can guide improvements in order-fulfillment and CRM efforts. True


26-The implementation of most EC applications requires the use of all of the following support services EXCEPT: infrastructure and technology security manufacturing order fulfillment, delivery, and payment

27-Most EC applications are based on ________ that begin with an order, frequently a ________ order.

pull operations; standard

push operations; customized

push operations; standard

pull operations; customized

28-All services related to making sure a customer gets what he/she ordered within an acceptable amount of time is called: logistics.

front-office operations.

order fulfillment.

back-office operations.

29-Packing, delivery, accounting and logistics are examples of: logistics.

back-office operations.

front-office operations.

order fulfillment.

30-Customer-facing activities or ________ are activities, such as advertising and order taking, that are visible to customers. back-office operations

order fulfillment


front-office operations

31-The Council of Supply Chain Management Professionals defines ________ as "the process of planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." front-office operations

back-office operations

order fulfillment


32-A typical EC fulfillment process involves all of the following activities EXCEPT: Checking for in-stock availability.

Just-in-time inventory management.

Making sure the customer will pay.

Replenishment and returns.

33-The administrative activities of order taking and fulfillment involve all of the following activities EXCEPT: sales quote.

shipment release.

order acknowledgment.

accounts payable.

34-The major difference between e-logistics and traditional logistics is: e-logistics deals with the

traditional logistics deals

traditional logistics


movement of large with movement of large amounts of materials to a amounts of materials to a few destinations. few destinations.

applies only to manufacturers.

outsources all logistics functions.

35-The inability to deliver products on time is a typical problem: in both off-line unique to eand e-commerce. commerce.

in traditional logistics only because the problem has been solved in e-commerce.

in global operations, but it is rarely a problem in domestic operations.

36-________ are a major source of uncertainty in supply chains. Internal manufacturing schedules

Demand forecasts

Inventory delivery schedules

Foreign currency exchange rates

37-________ helps locate shipments in real time to minimize delays and enhance customer service. 3PL




38-Solutions to problems in the supply chain for EC companies are: critical during start-up but usually unique generic across both usually become manageable and for each EC EC and traditional insignificant as EC companies company. companies. mature.

so complex that most EC companies cannot afford to implement them.

39-Improvements in EC order-taking: may come from within the are accomplished are accomplished organization, from solely through solely through improved links with implementing linkages improvements within logistics, and through with payment systems. the organization. linkages with payment systems.

are accomplished solely through improved links with logistics.

40-________ are useful in reducing inventory and decreasing the incidence of out-of-stocks. Such systems also are useful in maintaining an inventory of repair items so repairs can be expedited. ERP systems

Warehouse management systems

Replenishment systems

Stockkeeping unit systems

41-Automated warehouses for B2C companies are designed: to facilitate the delivery of small quantities of product to a very large number of customers.

to facilitate the delivery of large quantities of product to a small number of customers.

to accommodate much larger inventory levels than traditional warehouses.

to help transition B2C companies into B2B companies.

42-________ are intermediaries that prepare goods for shipping on air carriers, trucks, or other transport means. Outsourcers




43-All of the following apply to global logistics systems EXCEPT: An increase in global trading created a need for an effective global logistic system.

The number of partners in such situations is larger, which increases the need for coordination, communication, and collaboration.

These systems are secure when the Internet is the centric technology platform.

Order fulfillment problems tend to be even larger in longer supply chains that cross country borders.

44-The second most often cited reason for customers not buying on the Web is: not being able to see or try the lack of a good on a product before buying return mechanism. it.

concern that ordered concerns products won't be delivered about fraud. on time.

45-________ is an innovative order fulfillment strategy in which components for a product come from two or more physical locations. Leveraged shipments


Order postponement

Rolling warehouse

46-A decision support tool that helps determine whether it is economical to deliver goods to a neighborhood area in one trip is: CRM model.

ERP model.

SCM analysis.

delivery-value density.

47-________ recognizes that ________ are the core of a business and that a company's success depends on effectively managing its relationships with them Supplier relationship Customer relationship Vendor relationship Partner relationship management; customers management; vendor management; partners management; suppliers

48-Major limitations of CRM include all of the following EXCEPT: it is difficult to it is difficult to support it is difficult to justify the mobile employees with develop competitive expense of some CRM applications. CRM applications. CRM.

it requires integration with a company's other information systems, which may be difficult and expensive.

49-Metrics in customer service and CRM include all of the following EXCEPT: site availability.

on-time order fulfillment.

product quality.

response time.

50-Data analytics are a valuable tool because it can provide all of the following EXCEPT: what-if scenarios. financial reporting customer segmentation groupings. profitability analysis.

51-Medium and large corporations organize and store data in a central repository called a(n) ________ so that it will be easy to analyze later on, when needed. knowledge system

data base

expert system

data warehouse

52-Automating inquiry routing and answering queries requires ________ which can be generated from historical data and from human expertise and stored for use whenever needed. knowledge




53-To overcome the problem of finding buyers or sellers online, a company may use ________ such as B2Business.net or Yahoo! Small Business. intelligent agents

search engines

directory services

industry-focused newsletters

54-TRUSTe, BBBOnline, and Ernst & Young's trust service are used both in B2C and B2B for all of the following reasons EXCEPT: One cannot touch the seller's products.

Trust is critical Companies must outsource Buyers may not be for EC. known to sellers. trust services.

55-The major reasons why many companies prefer to outsource some of the support services include all of the following EXCEPT: Lack of experience or The desire to resources needed for many of concentrate on the the support services. core business.

For a sustainable competitive advantage.

The need to have services up and running rapidly.

Chapter 14 E-Commerce Strategy and Global EC 1-Strategies are based on performance indexes that are used as targets and measures of success. True


2-An organizational strategy is a detailed plan for how a business is going to accomplish its mission, what its goals should be, and what plans and policies it will need to accomplish these goals. True


3-Any contemporary strategy-setting process must include the Internet. True


4-In Porter's view, the majority of the Internet's impacts on the five competitive forces have been positive. True


5-Researchers have suggested that more extensive strategic information systems planning in an uncertain environment produces greater planning success. True


6-No matter how large or how small the organization, the strategic planning process forces corporate executives, a company's general manager, or a small business owner to assess the current position of the firm, where it should be, and how to get from here to there. True


7-In the strategy initiation phase, the organization examines itself, its environment, and the potential contribution that the Internet and other emerging technologies can make to the business. True


8-A value proposition is actually a financial statement that summarizes the annual revenue and profit targets. True


9-The two major and successful Internet-based businesses Google and eBay have similar core competencies. True


10-SWOT analysis is one method for scanning the business environment to collect and interpret relevant information about direct competitors, indirect competitors, and potential competitors. True


11-In the strategy implementation phase, general long-term plans are developed for carrying out the projects that had been agreed on in the strategy formulation phase. True


12-Resource allocation refers to the processes of making the selected applications and projects a reality, such as hiring staff; purchasing equipment; licensing, purchasing, or writing software; and contracting vendors. True


13-Strategy assessment is the continuous evaluation of progress toward the organization's strategic goals, resulting in corrective action and, if necessary, strategy reformulation. True


14-The basic method in scenario planning is that a group of analysts generates simulation games for policy makers. The games combine projected factors about the future, such as demographics, geography, and industrial information with plausible alternative social, technical, economic, and political trends. True


15-A business plan is a tool that is an alternative to narrowly focused financial assessments by measuring organizational performance in four areas: finance, customers' assessments, internal business processes, and learning and growth. True


16-The primary reasons for writing a business plan are to acquire funding and nonfinancial resources, to recruit senior management, and to force the business owner to think ahead, set achievable goals, seek out and analyze competitors. True


17-Entrepreneurs in start-up companies use business plans to get funding from investors, such as a venture capitalist or a bank.



18-The information systems strategy is set primarily by determining what information and associated information systems are required to carry out the business strategy. True


19-In e-commerce, evidence shows that there is always a real advantage to being the first mover in an industry or market segment. True


20-The disadvantages a brick-and-mortar company faces by creating an independent division are that it may be very costly, risky, or both. True


21-Disposing of excess equipment was the motivation behind the implementation of forward e-auctions at General Motors. This is an example of a technology-driven strategy because GM had a specific problem that an EC application could solve. True


22-In a click-and-mortar business, the allocation of resources between off-line and online activities can create difficulties, especially in sell-side projects because the two activities could be competitors. True


23-Having a strong project champion on an e-commerce project is seldom important to the success of the project because of inter-personal conflicts caused by a powerful champion. True


24-The purpose of GlobalNetXchange, which was founded by major retailers such as Sears, was to reduce procurement costs and product prices for its members while making the purchase process more efficient.



25-At the implementation stage, firms may need to dramatically change business processes to accommodate the changes an EC strategy brings. In those instances, business process reengineering (BPR) is usually necessary. False


26-For ________ companies, it may be even more important to change strategies quickly. service



pure play

27-Capabilities of the Internet that have made it more difficult for companies to capture profits include all of the following EXCEPT: The Internet reduces the The Internet makes The Internet makes difficulty of purchasing, information widely it easier to make marketing, and available. secure payments. distribution.

The Internet allows buyers and sellers to find and transact business with one another more easily.

28-Projections of the business technological, political, economic, and other environments are called: competitive intelligence

value propositions

SWOT analysis


29-The unique combination of resources, experiences, and expertise within a particular firm is called their: corporate strategy.

competitive advantage.

functional strategy.

core competencies.

30-All of the following are elements of a company's strategy EXCEPT: forecasts.

day-to-day operations.

competitor analysis.

company analysis.

31-All of the following about the strategic planning process are true EXCEPT: The process of

The strategic

The strategic planning process

The strategic

developing a strategy maybe even more important than the strategy.

planning process forces corporate executives, a is cyclical and company's general manager, or a continuous. small business owner to assess the current position of the firm, where it should be, and how to achieve objectives.

planning process begins with strategy formulation.

32-A specific outcome of the strategy initiation phase is the ________, which includes the vision, mission, value proposition, goals, capabilities, constraints, strengths, and weaknesses of the company functional strategy

core competency

company analysis

value proposition

33-A specific outcome of the strategy initiation phase is a clear statement of the company's ________, which summarizes the customer segment, competitor target, and the core differentiation of one's product from the offerings of competitors. functional strategy

core competency

value proposition

company analysis

34-Google's ________ is its expertise in information search technology. company analysis

core competency

functional strategy

value proposition

35-Many of the outcomes from the first two phases of the strategic planning process, such as a determination of goals, competitor analysis, strategic opportunities, and risk analysis come together in a ________. SWOT plan

technology audit

value proposition

business plan

36-________ is the process of making the selected applications and projects a reality by hiring staff; purchasing equipment; licensing, purchasing, or writing software; and contracting vendors. Strategy assessment

Project management

Resource allocation

Project planning

37-An analytical tool in which a company looks for points of differentiation between competitors and itself is called:

strategy assessment

competitor analysis grid

scenario planning

SWOT analysis

38-________ is the continuous evaluation of progress toward the organization's strategic goals, resulting in corrective action and, if necessary, strategy reformulation. Strategy assessment

Competitor analysis grid

Scenario planning

SWOT analysis

39-A management tool that assesses organizational progress toward strategic goals by measuring performance in a number of different area is: SWOT analysis.

balanced scorecard.

Web analytics.

BCG growth-share matrix.

40-After four years in business, a magazine publisher decides to add the online distribution of its magazine to its existing traditional publishing business. The company would need to develop a: business case.

business strategy.

business plan.

business metric.

41-All of the following are situations when a business plan should be done EXCEPT: When an existing company is planning to create a separate division.

When an existing business is deploying a CRM system.

When an existing company is planning to launch the company in a new direction.

When a new business is seeking start-up funds and other resources.

42-Which of the following about business plans and business cases is NOT correct? One difference is that the business plan concentrates on the viability of a company, whereas a business case assesses both viability of the project and the fit of the initiative with the firm's mission and goals.

The audiences are the same senior management and the board or directors.

The content of a business case is similar to that of a business plan.

The purposes are the same to justify a specific investment of funds.

43-The risks of being a first mover include all of the following EXCEPT: the risk that the high cost of pioneering EC the move

over the long run first movers are substantially

the chance that a second wave of competitors will eliminate a first

will be too late.


less profitable than followers.

mover's lead through lower cost and innovation.

44-Factors that determine whether a first mover succeeds or fails in the EC marketplace include all of the following EXCEPT: the nature of the product.

whether the company can be the best in the market.

the size of the opportunity.

the speed of market entry.

45-The most efficient way to expand an organization's scope is: by expanding the firm's appeal to a new set of customers.

to introduce new products or by increasing the services into new or existing size or scale of markets without increasing the business. production facilities or staff.

to buy a company with complementary products or services.

46-Separating a company's online operations into a new company makes sense in each of the following situations EXCEPT: when the subsidiary can be created without dependence on current operations and legacy systems.

when the company is unable to form new alliances, attract new talent, or raise additional funding.

when a new business model needs to be when the volume developed apart from the of anticipated econstraints of current business is large. operation.

47-Rite Aid, a click-and mortar firm, enhanced its EC future by: Creating a separate company.

Creating an online Forming a joint brand. venture.

Buying an equity stake in a existing EC company.

48-Incorrect approaches to EC strategy selection include all of the following EXCEPT: indiscriminately funding many "trend-surfing," or following betting it all in a using a lateprojects and hoping for a few the crowd to the newest and single, high-stakes mover winners. most fashionable idea. initiative. strategy.

49-The most dangerous risk to a company engaged in e-commerce is:

customer and business partner risk.

threat posed by hackers. negligent loss of data. business risk.

50-All of the following determine the degree of collaboration between off-line and online activities in a business EXCEPT: the pricing strategy.

the use of innovative processes that support collaboration.

the ability of top management to corporate introduce change properly. culture.

51-The ________ pricing strategy means adding up all the costs involved, such as material, labor, rent, overhead, and so forth, and adding a percentage mark-up as profit. cost-plus

revenue markup

price percentage

competitor model

52-Internet technologies can provide consumers with easier access to pricing information, which increases their bargaining power. To remain competitive and profitable, sellers need smarter pricing strategies, which include all of the following strategies EXCEPT: greater precision in more adaptability in setting prices. changing prices.

reducing prices.

new ways of customer segmentation for differentiated pricing.

53-Implementing EC often requires significant investments in infrastructure. Therefore, a good way to start is to undertake ________. a multi-divisional EC a large, non-trivial EC one or a few small EC project project pilot projects

a single division EC project

54-A ________ is a form of business alliance composed of several business partners that share the costs and resources for the development or production of a product or service. supply chain

temporary corporation


virtual corporation

55-The most important objectives of strategic assessment are all of the following EXCEPT: Determine if the EC strategy and projects are still viable in the current environment.

Measure the extent to which the EC strategy and ensuing projects are delivering what they were

Reassess the initial strategy in order to learn from mistakes and improve future

Identify what competitors are doing to avoid headon competition.

supposed to deliver.


Chapter 15 1-From 1995 through 2000, many EC projects and start-up companies were funded with little analysis of their business viability or finances. True


2-The result of the rush to invest in EC projects and start-up companies was the 2001— 2003 "dot-com bust," when hundreds of EC startups went out of business and the stock market crashed. True


3-After the dot-com bust, most IT executives acquired the knowledge and tools to do ROI calculations on proposed EC investments. True


4-One reason why EC justification is needed is that companies now realize that EC is not necessarily the solution to all problems. True


5-According to a CIO Insight report, EC justification decreases the credibility of EC projects. True


6-One basic way to categorize different EC investments is to distinguish between investment in infrastructure and investment in specific EC applications. True


7-Infrastructure investments are made for the short-term because of frequent technological changes. True


8-Cost-benefit analysis is frequently assessed by return on investment (ROI), which is also the name of a specific method for evaluating investments. True


9-All EC investments need to be formally justified to insure that they align with the company's competitive strategy. True


10-Metrics are used to describe costs, benefits, or the ratio between them and need to be defined properly with a clear way to measure them. True


11-Key performance indicators (KPI) are used to qualitatively track critical metrics or success factors. True


12-A major difficulty in justifying EC projects is that many costs and benefits are intangible and therefore very difficult to measure. True


13-Creating a competitive advantage, providing a benefit to society, and improving the company's image are examples of tangible benefits that might be realized from an EC project. True


14-Cannibalization occurs when a new EC initiative produces substantial online sales, but traditional sales fall such that no increase in total revenue occurs. True


15-The results of any investment justification in eCRM depend on the time frame used to measure changes in productivity. True


16-Because many EC investments in eCRM take five to six years to show significant positive results, real productivity gains often do not get measured correctly. True


17-In preparing the business case for EC investment, managers should examine the potential additional revenues that are expressed in the revenue models, such as increased revenues via products or services from a larger global market because of more effective product marketing on the Web. True


18-The ROI method uses a formula that divides net revenues by the initial cost. The result is a ratio that measures the ROI for each year or for an entire period. True


19-In an NPV analysis, analysts convert future values of benefits to their present-value equivalents by discounting future cash flows at the risk-free rate set by the Federal Reserve Bank. True


20-Given the diversity of activities involved in e-procurement, the metrics used to measure the value of e-procurement must reflect how well each process is accomplished; and take into consideration whether the company is a buyer or seller. True


21-According to recent surveys of eCRM applications, there are been mixed payoffs, but a majority of companies have demonstrated a significantly positive ROI for their eCRM investments. True


22-Large companies often have several integrated intranet and other information systems that determine the success of a Web portal. Thus, the justification for a Web portal must focus on both business ROI and technology ROI. False


23-To comply with the Sarbanes-Oxley Act, public companies must document every internal process and external effect that will have an impact on their financial health, which provide a robust foundation from which to develop a budget. True


24-Critical elements that can affect the value of EC across cultures are perceived trust, consumer loyalty, regulation, political influences, and even the content of online ads. False


25-Developing economies often face power blackouts, unreliable telecommunications infrastructure, undependable delivery mechanisms, and a relatively few customers who own computers and credit cards. These limitations can be overcome when predicting EC investment payoffs by using a combination of break-even analysis and NPV. True


26-CIOs need to effectively communicate the value of proposed EC projects in order to gain approval for all of the following reasons EXCEPT: Some large companies, and many public organizations, mandate a formal evaluation of

Companies now realize that EC is not necessarily the solution to all

Demand for expanding or initiating e-business projects is no longer strong so there are

The success of EC projects may be assessed in order to pay bonuses to those

requests for funding.


involved with the project.

fewer requests for funding.

27-One basic way to categorize different EC investments is to distinguish between investments in infrastructure and investment in specific EC applications because benefits from infrastructure investments: have a low return.

are made for the longterm.

depend on the EC applications.

are very complex.

28-The basic reasons that companies invest in IT and EC are all of the following EXCEPT: to increase customer satisfaction and retention.

to improve business to reduce timeprocesses. to-market.

to justify new marketing campaigns.

29-Not all EC investments need to be formally justified. All of the following are cases where formal evaluation may not be needed EXCEPT: When the value of the investment is relatively small for the organization.

When the EC project is mandated and must be done regardless of the costs and benefits.

When the relevant data When competitors are not available, are have made that inaccurate, or are too type of investment. volatile.

30-Metrics are used to describe all of the following EXCEPT: standards.

the ratio of costs to benefits.



31-Productivity benefits from using EC are difficult to measure because: EC gains in certain areas of the there is no time qualitative benefits company may be offset by losses in lag in EC gains. do not count. other areas.

the payoffs are too short.

32-The relationship between EC investment and organizational performance is: shared with other investments.


not measurable.


33-EC costs and benefits can be classified into two broad categories: short-term and capital. tangible and intangible. direct and routine. operational and strategic.

34-The New York Metropolitan Transit Authority (MTA) did not need to open another airport for almost two decades, even though air traffic had tripled because of productivity gains derived from improved IT systems. IT systems added by the MTA played critical roles in ticket reservations, passenger and luggage check-in, crew assignment and scheduling, runway maintenance and management, and gate assignments. This case illustrates that: Tangible benefits can Tangible costs can be Intangible benefits be complex, yet high, yet payoffs can be can be complex, yet substantial. achieved quickly. substantial.

Intangible costs can be high, yet payoffs can be achieved quickly.

35-An important category of intangible benefits is ________ factors that include comfort to employees, impact on the physical environment, changes to the power distribution in an organization, and preventing invasion of the privacy of employees and customers. ecosystem


social subsystem


36-In B2C, an example of a tangible EC metric from the buyer's perspective is: ease of use of EC. profit per customer. cost/price of the product. convenience in purchasing

37-For Governments, an example of an intangible EC metric is: lower tax rates.

increase in participation in government programs.

risk reduction.

reelection of candidates.

38-The major steps in the process of justifying large-scale EC and IT projects include all of the following EXCEPT: Lay an appropriate foundation for analysis with your vendor, and then conduct your ROI.

Be careful not to overDocument and verify all estimate cost and underfigures used in the estimate benefits (a calculation. Clarify all tendency of many assumptions. managers).

Do not leave out strategic benefits, including longterm ones.

39-Types of costs and cost issues that need to be considered in justifying EC investments include all of the following EXCEPT: initial upfront costs. the allocation of indirect costs. opportunity costs. system operating costs.

40-Traditional methods for evaluating EC investments include all of the following EXCEPT: Discount rate



Break-even or payback period

41-Dan Welch, who owns three World Cup Coffee shops in Portland, Oregon, estimates that his free Wi-Fi network has added 10 percent to his overall revenue. Welch credits WiFi consumers with spending three times as much on food compared with the average consumer. This is an example of: technology ROI.

business ROI.

technology IRR.

business NPV.

42-Pouilly's Poodle Shop wants to produce monthly cash flows from its Internet DoggieCam investment. The most appropriate method for assessing this investment is: Break-even analysis.

Total cost of ownership.

Internal rate of return (IRR).


43-By calculating the difference between TCO and TBO, one can compute the ________ of an IT investment. Internal rate of return (IRR)

Total cost of ownership

Payoff Break-even analysis

44-The disadvantage of the NPV method for evaluating EC and IT is: it may be difficult to the true benefits classify outlays as expenses are difficult to or investments. measure.

it is difficult to compare it assumes projects of unequal lifes reinvestment at the same rate. pans or sizes

45-The following direct metrics indicate progress in e-procurement EXCEPT: increased order fulfillment rate.

decreased number of rejects received from suppliers.

increased on-time deliveries.

reduced inventory costs.

46-Justifying information security projects: should focus on defending against external threats such as hackers and malware.

is not needed because it is wellknown that preventing network security problems is less labor intensive than cleaning up virus infections.

is not done should be done because ROI because employee calculators are not security training is available. usually poorly done.

47-The average-cost curve (AVC) of physical products and digital products: are different because the AVC of digital products declines as quantity are both are both Uincreases forming a L-shape, while Lthe AVC of physical products is U- shaped. shaped. shaped.

are different because the AVC of physical products declines as quantity increases forming a Lshape, while the AVC of digital products is U-shaped.

48-When computing agency cost, companies should consider: only production-related ignore productionrelated costs and costs and ignore transaction costs. transaction costs.

only transaction costs both productionand ignore production- related costs and related costs. transaction costs.

49-Transaction costs include all of the following EXCEPT: Search costs incurred by buyers and sellers in locating each other and specific products and services.

Negotiation costs result from Production meetings, communicationcosts incurred related expenses, exchanges of for labor and technical data or brochures, overhead. entertainment, and legal costs.

Monitoring costs incurred when buyers and sellers make sure that the exchange proceeds according to the terms under which the sale was made.

50-McAfee allows users of its VirusScan virus-detection software to automatically update the latest security patches online. This is an example of ________ to attract customers who value this automatic update. product or service differentiation.

core competency.

competitive advantage.


51-A Web-based seller of CDs carefully monitors the prices charged by its competitors for identical products. This company has the ability to change a given price within three minutes in response to changes by competitors. This is an example of EC: competitive advantage.

agility. core competency.

product or service differentiation.

52-All of the following are critical success factors (CSFs) of the Old Economy EXCEPT: Create new partnerships, stay with core competency.

Deliver highvalue products.

Build market share to get Compete to sell economies of scale. product.

53-As a company moves to incorporate an online presence with its traditional brick-andmortar operation, it adds the costs related to training for all personnel in the capabilities of the EC system and a new advertising campaign to announce its new site to the costs directly associated with building the new Web presence. In this case, training and advertising are examples of: direct costs.

transaction costs.

indirect costs.

complementary investments.

54-One of the strengths of EC is the ease with which its adopters can reach a global population of consumers. However, EC-driven businesses must consider the critical elements affecting the value of EC across cultures. Those elements include all of the following EXCEPT: perceived trust.

delivery delays.

political influences.

consumer loyalty.

55-All of the following apply to EC in developing economies EXCEPT: The potential volume of transactions in developed countries can make EC investments more attractive for established firms than new firms because established firms have already recovered the costs of their IT infrastructures.

Developing economies struggle with various issues that create too many business and technology risks to justify investment in those economies at this time.

Developing economies often face power blackouts and unreliable infrastructure and delivery mechanisms creating limitations that make it difficult for firms to predict whether EC investments will pay off, and when.

Developing economies, such as China and India, represent a significant opportunity for EC to connect businesses to customers, as well as other businesses.

Chpater 16 1-Unlike the brick-and-mortar marketplace, the failure rate for online companies is low. True


2-Online businesses may be pure play companies or click-and-mortar companies that add online projects, such as e-procurement or selling online, as additional marketing channels. True


3-To create successful entrepreneurial ventures in EC, Maier suggests that starting small with many founders is the best option. True


4-The first step is creating a new company is to identify a consumer or business need in the marketplace and an innovation to address that need. True


5-Many good ideas and realistic initiatives have failed because of poor execution due to the lack of sufficient business skills by the owners or principals of the business. True


6-As a general guideline, although virtually anything is available for sale on the Internet, the degree of sales success is somewhat dependent on the type of item or service being offered for sale and how it can be delivered. True


7-Medium and large businesses, or those seeking external funding, must have an informal business plan. True


8-The primary reason an entrepreneur writes a business plan is to acquire funding from a bank, an angel investor, a venture capitalist, or the financial markets. True


9-Some entrepreneur may simply invest personal funds from savings, personal lines of credit, or a house mortgage since these sources of "bootstrap funding" are typically enough. True


10-When the entrepreneur's personal funds are insufficient, the entrepreneur will go to friends, family members, or to financial institutions. True


11-An important source of financial support or direct funding, for pre-VC firms is an incubator. True


12-Venture capitalists tend to invest in companies that have identified what seems to be an outstanding business opportunity, have taken some action to make the opportunity happen, such as written a new software application or secured a patent , and need an infusion of funds and management expertise to expand and launch the business. True


13-There is a serious downside for start-up businesses that acquire venture capital because they lose control over the business. True


14-Once the company is well known and successful, it can go to a stock exchange to raise money via an initial public offer or IPO. True


15-Organizational transformation is a comprehensive concept that implies not only a major change, but also a sharp break from the past. True


16-Business process management (BPM) systems monitor the execution of the business processes so that managers can analyze and change processes in response to data, rather than on just a hunch. True


17-Transforming an existing business to an e-business means a manager must change business processes, but not the way people work or communicate. True


18-An informational Web site provides opportunities for the customers and the business to communicate and share information. True


19-Selecting a domain name is an important marketing and branding consideration for a business because it will be the business's online address and create an identity for the business. True


20-Up-to-the-minute dynamic content is what attracts new and returning customers ("eyeballs") and makes them stay longer ("stickiness"), which builds customer loyalty. True


21-Because podcasts are audio-based media files, it enables companies to deliver audiospecific content, including music, speeches, radio-style presentations, and more. True


22-Amazon.com offers personalize content by tracking visitors' behavior via cookies, which is used to generate dynamic Web pages that recommend products based on previous purchases and recently viewed items. Amazon.com offers this personalized content because it is very inexpensive and does not impact performance. True


23-Web designers execute successful site navigation through consistency and through navigation aids such as a navigation bar, a navigation column, a site map, and search tools. False


24-Web site usability means that people who use the Web site can do so quickly and easily to accomplish their tasks and may also consider such factors as cost-effectiveness and usefulness. False


25-Card-not-present (CNP) transactions increase the risk and uncertainty of online transactions, which increases transaction fees to offset the increased risks. False


26-When creating a new business, the first step is to: acquire financing needed to make the business successful.

investigate all existing opportunities.

identify a consumer or business need that isn't presently being met.

write a business case or plan.

27-The principle reason for writing a business plan is to: provide strategic direction to employees.

acquire external funding.

provide an operational framework for the business.

help the founders remember what they are trying to accomplish.

28-The key difference between an e-business plan and a traditional business plan is that the entrepreneur must:

develop a ten-year plan.

understand all aspects of understand that traditional the technology required to rules do not apply when doing implement the plan. business on the Internet.

understand that the Internet is a unique sales channel.

29-The difference between a business plan and a business case is: all new businesses should have a a business case business plan, but only existing is a part of businesses planning a major EC every business or IT initiative should develop a plan. business case.

business cases are all businesses need a brief and general, business case, but only while business plans new businesses need a are long and business plan. detailed.

30-A(n) ________ is a wealthy individual who contributes personal funds and possibly expertise at the earliest stage of business development. incubator

venture capitalist



31-A(n) ________ is a company, university, or nonprofit organization that supports promising businesses in their initial stages of development. incubator



venture capitalist

32-________ is money invested in a business by an individual or a group of individuals in exchange for equity in the business. start-up funding

operating capital

venture capital

advance funding

33-The greatest difficulty in dealing with venture capital is: finding the money a venture capitalist will require.

finding a willing venture capitalist.

the loss of control a venture capitalist demands.

relocating the business to an incubator.

34-The relationship between stock price and when an investor invests is: the entrepreneur will pay the venture capitalist IPO investors will will pay the highest pay the highest price the highest price per share price per share. per share.

the angel investor will pay the highest price per share

35-Chaplin's Pet Store has been in business for many years. Chaplin, the present owner, decides to open an online sales channel where he can advertise and sell the same gourmet pet food. This is an example of adding: a portal.


a storefront.

a reverse auction

36-Reprise Electronics, a conglomerate that manufactures and sells all kinds of electronic goods under several brand names, currently has separate Web sites for each of its brands. The company decides to bring all of the Web sites together through a single site that, in addition to providing links to the brand pages, will also provide general information about how to select electronic merchandise and informational pages about the Reprise company today and its management team. This is an example of adding: a reverse auction.


a portal.

a storefront.

37-In an organizational transformation: there is a change in the change may affect outlook, but rarely a only one or a few of change in procedures or the functional areas investment in of the business. infrastructure.

there is always a sharp there are incremental break with the past and changes to the ways every aspect of the things have always business will probably been done. change.

38-A(n) ________ Web site does little more than provide information about the business and its products. dynamic




39-A major entertaining company has four studios that have been in the same location for more than ten years. The company includes a page on its Web site with addresses, phone numbers, and general e-mail addresses for each of these studios. None of this information has changed since the Web site was developed. This is an example of ________ content. dynamic



40-Secondary content that offers a coupon, rebate, or special service is called:



up selling.



41-Reviews, testimonials, expert advice, or further explanation about the product are called: comment.


up selling.


42-The ________ is how Web pages are organized, labeled, and navigated to support browsing and searching. Web design

Web site map

information architecture

Web layout

43-Creating content that offers upgraded or more expensive versions of the product is called: comment.



up selling.

44-One of the first decisions to be made in building a Web site is: whether to provide personalized who will content host it.

the domain name

how to protect the Web site from hackers

45-A(n) ________ is an exact duplicate of the original Web site physically located on a Web server on another continent. backup site

a download site

mirror site

a hot site

46-The Web hosting option under which the business acquires the hardware, software, staff, and dedicated telecommunications services needed to host a Web site is called: mirror hosting


using a storebuilder.

ISP hosting.

47-The ________ is the name-based address that identifies an Internet-connected server. URL name

host name

domain name

IP address

48-Content not available anywhere else on the Web is called: restricted content.

reserved content.

commodity content.

premium content.

49-The concept of consistency in Web site design includes: making sure the messages sent to customers who contact the company are consistent.

making sure customers are treated consistently when they contact customer service.

making sure Web pages look the same no matter which browser a customer is using.

making sure all visitors consistently find what they are looking for.

50-All of the following are advantages of building Web sites internally EXCEPT: it allows the company to use inhouse expertise.

it provides the fastest speed to market.

it allows the company to it allows the company to exert protect proprietary greater control on the process technology. and the resulting site.

51-Banks are more selective about who gets an account for accepting credit cards online because online transactions do not produce much revenue for banks

dot com failures have made banks less willing to work with online companies.

fees are higher for online processing

CNP transactions are less secure and riskier.

52-In addition to providing an easy mechanism for buying books, the Amazon.com Web site is easily searchable by book title and author. It also has book reviews and suggests titles based on previous purchase activity. These enhancements make the Amazon site a favorite for readers. This is an example of: internal Web site promotion

search engine optimization

using a meta tag.

53-________ offers one of the most popular storefront packages at with three levels of merchant solutions: starter, standard, and professional. Google




54-Options for acquiring storefronts include all of the following EXCEPT:


Build from scratch.

Build them from components

Build from templates or storebuilders.

Join a mall.

55-Before choosing the appropriate Web site development option, you need to consider all of the following issues in order to generate a list of requirements and capabilities EXCEPT: Can customers What might be the place orders reaction of competitors? online?

What kinds of products or Who are the target services will the business sell customers? online?

Chapter 17 1-For many e-businesses, a majority of their customer online traffic comes from search engines. True


2-All marketing methods used to increase the ranking of a company's Web site in the search results are ethical. True


3-Companies use search engine marketing (SEM) methods to increase their chance of "getting found" among competing Web sites. True


4-The volume of e-mail spam has decreased because of the widespread use and effectiveness of antispam software and ISP spam filters. True


5-Spam sent to blogs, cellular phones, or other types of messaging media to promote products or services is called media spam. True


6-Web pages that have been created to trick search engines into offering poor-quality results are referred to as search engine spam. True


7-Acts or activities that are unethical are also illegal. True


8-Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce are known as private property. True


9-Questions or disputes about the legality of spam can be resolved easily by referring to relevant laws. True


10-Legal precedents are decisions by judges that may be used as standards in similar legal cases that follow. True


11-Political spam, regardless of its content, is legal in the United States because it is a form of speech protected by the Constitution. True


12-Significant changes in the nature of business or crimes lead to new laws because laws must remain responsive to new threats or abuses. True


13-Due process is a legal claim that others not interfere with a protected interest, such as privacy, intellectual property, or free speech.



14-Because of intellectual property law, the recording industry can file lawsuits for copyright infringement against YouTube or MySpace if it profits from the recording industry's property without authorization and compensation. True


15-A company can be sued for libel if its EC site contains a defamatory or untrue statement that causes damage to a person or another company. True


16-A corporate code of ethics should specify whether the company allows employees to set up their own Web pages on the company intranet and the rules for private e-mail usage during working hours. True


17-EC web site content needs to be reviewed by attorneys with cyber law expertise to ensure that there nothing is unethical or illegal and that all required statements and disclaimers are properly included. True


18-Ethical principles that apply to the collection and use of personal information, such as notifying customers of information practices before collecting it, do not apply to information collected in e-commerce. True


19-As a defense against abusive trackback tactics by profit-motivated spammers, trackback spam filters are implemented in blog publishing systems. True


20-Blocking tools cannot stop adware or software that gets bundled with other popular applications, such as Kazaa, from delivering pop-up ads because they originate from the desktop, and not the browser. False


21-Unlike hate sites that can cause problems for corporations or lead to lawsuits, fan sites are beneficial and welcomed by the entertainment industry. True


22-Online merchants reject about 10 percent of incoming orders because of suspicions of fraud; and about 3% of accepted orders turn out to be fraudulent. True


23-Electronic signatures improve EC by helping to distinguish between legitimate and fraud transactions and build trust and predictability needed by parties doing business online. False


24-Several public organizations and private companies attempt to protect consumers and build users' trust and confidence in the Internet through a seal of quality, such as Trustmark and BBBOnline. False


25-Online sellers can better protect themselves against fraud by requiring customers whose billing address is different from the shipping address to call their bank and have the alternate address added to their bank account. False


26-Approximately what percent of Internet shoppers use search engines to find products and services? 75%




27-Sending spam that disguises a sales pitch to look like a personal e-mail so that it will bypass e-mail spam filters violates the: Controlling the Assault of NonSolicited Pornography and Marketing (CAN-SPAM) Act.

Computer Fraud and Abuse Act (CFAA)

Children's Internet Protection Act (CIPA)

First Amendment

28-To defend against unethical and illegal business tactics that exploit EC operations, Google, MSN Search, and Yahoo have turned to all of the following aggressive measures except: Banned violators' sites.

Built algorithms that check for and penalize deceptive rank-boosting practices.

Implemented spam site Implemented reporting systems. honeypots.

29-Having control over the collection, storage, and dissemination of personal information is included in the category of: duties




30-A decision by a judge that may be used as a standard in similar cases that follow is referred to as: legal precedent

common law

intellectual property


31-Critics of political spam are against its use because they believe that: it increases candidates' all spam is a nuisance, clogs mail dependence on wealthy servers, and creates security risks fundraisers,

it is illegal

it leads to political favoritism

32-Due process is a legal obligation not to interfere with a protected interest

a guarantee of basic fairness and fair procedures in legal action.

a legal claim that others a set of enforceable not interfere with a rules and protected interest. regulations.

33-A duty is a guarantee of basic a legal obligation not to a legal claim that others fairness and fair not interfere with a interfere with a procedures in legal protected interest. protected interest action.

a set of enforceable rules and regulations.

34-Property rights relevant to e-commerce include all of the following EXCEPT: The right to benefit, The right to bring criminal charges against a transfer, or sell the property. violator.

The right to exclude others from the property.

Control of the use of the property.

35-A music company can file a ________ against YouTube and MySpace for any interference with the ability to profit from its IP or for profiting from the recording industry's property without authorization and compensation lawsuit or civil charge

nuisance charge

negligence charge

criminal charge

36-________ enable an organization that has suffered a loss due to spammers to bring a lawsuit against spammers responsible for the loss. Civil laws


Common laws

Criminal laws

37-Intellectual property law is the area of law that is associated with each of the following EXCEPT: visual and performing arts.

electronic databases, advertising, and video games.

patent law, copyright law, trademark law, and trade secret law.

business contracts

38-Which of the following is true about copyrights? The entertainment industry, led primarily by the Motion Picture Association of America

The Recording Industry Association of America (RIAA) uses lawsuits against universities, but

In the United States, after work is created and in a tangible form such as through

Copyright protection on artistic property such as a movie or

(MPAA) and RIAA, is trying technical solutions via the legal system to protect its interests.

not students, to stamp out rampant music piracy on university campuses.

writing or recording, the author can apply for a federal copyright.

music lasts forever, even after the death of the author or creator.

39-Each of the following statements about digital rights management (DRM) is true EXCEPT: DRM are technologybased protection measures.

DRM is an umbrella term for DRM technologies any arrangement that allows a were developed with vendor of content in electronic strict regard for form to control the material and privacy protection. restrict its usage.

Typically, the content is a copyrighted digital work to which the vendor holds right.

40-Fair use means that a copyright holder has exclusive rights to the invention for a fixed number of years.

that copyrighted material can be used for noncommercial purposes without paying royalties or getting permission.

that the author or creator that copyrighted of a book, movie, or material can be musical composition can digitally protected use their creations for an against misuse. unlimited number of years.

41-Which of the following is true about the scope of business ethics?

The scope of business ethics has not changed even though laws have expanded.

The scope of business ethics has expanded to encompass the nature and quality of the relationships with shareholders, customers, business partners, suppliers, the community, environment, and future generations.

The scope of business ethics has not changed because laws have not changed.

The scope of business ethics has been limited to company's actions with regard to how it treats employees and obeys laws.

42-An Internet acceptable use policy (AUP) is an important safeguard because: without a formal AUP, it is much more difficult to enforce acceptable behaviors and eliminate unacceptable behaviors, and punish violators.

employees may be using it includes a it required company e-mail to corporate code by the advertise their own of ethics. FTC. businesses.

43-Section 5 of the FTC Act does each of the following EXCEPT: prohibits unfair or deceptive EC practices.

requires protects monitoring of privacy. employees' e-mail.

gives the FTC authority to take action against companies whose lax security practices could expose customers' financial information to theft or loss,

44-Companies can improve their responsibility as custodians of customers' personal data by implementing: AUP. E-mail monitoring.


Opt in and opt out information practices.

45-Which of the following statements about the rights to privacy and free speech is not correct? As with all rights, the right of free speech is not unlimited.

Those rights have an The Internet has increasingly important role destroyed the in an information society right to privacy. and to EC.

Defamation laws put restrictions on what may be freely said or published.

46-All of the following are ways to use the Internet to find information about an individual EXCEPT: Using cookies, Reading an individual's espyware or keystroke mail, IM, blogs, or text loggers. messages.

Stealing the Wiretapping individual's communication lines. computer.

47-Private online communities that are only open to those who belong to them are called: splogs




48-A domain name is: intangible property protected by law

tangible property protected by law

intangible property that is tangible property that is not protected by law not protected by law

49-The ________ give law enforcement agencies broader range in their efforts to protect the public.

Electronic Freedom Foundation (EFF)

American Civil Liberties Union (ACLU)

U.S. Department of Justice (DOJ)


50-________ work on the principle that once Web surfers arrive at their site, a few of them will click on one of the linked advertisements and earn them a few cents for each click. Spammers




51-The least effective method to protect against pop-up ads and their risk is: Pop-up blocking software on users' computers.

Mozilla and Firefox Web ISPs using tools that browsers preventing pop- stop pop-ups from ups. appearing.

Minimizing the pop-up window.

52-All of the following statements apply to hate Web sites EXCEPT: Web sites that contain legitimate complaints that aren't defamatory, sponsored by competitors, or infringe upon trademark rights by confusing consumers are usually protected by the First Amendment.

Cyberbashing is the registration of a domain name that criticizes an organization or person.

The intent of most hate Web sites is to commit fraud.

Many hate sites are directed against large corporations such as Wal-Mart, Microsoft, and Nike.

53-A legally binding contract requires a few basic elements. Which of the following is not one of those elements? an offer




54-Examples of electronic signatures to help distinguish between legitimate and fraud transactions include all of the following EXCEPT: a name typed at the a Web site end of an e-mail development message by the sender agreement

a digitized image of a a secret code or PIN handwritten signature to identify the sender attached to an electronic to the recipient document

55-EC sellers need to protect against fraud and each of the following EXCEPT:

Customers who give false credit card or bad Public check information in payment for products keys. and services provided.

Use of their name Customers who deny by imposter that they placed an sellers. order.

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