E-commerce 2019: business. technology. society., 15e (Laudon/Traver)
Chapter 3 E-commerce Infrastructure: The Internet, Web, and Mobile Platform
1) During which period of time did the Institutionalization phase of Internet development take place?
A) 1950-1960
B) 1961-1974
C) 1975-1995
D) 1995-through the present
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
2) Which of the following occurred during the Commercialization phase of Internet development?
A) The fundamental building blocks of the Internet were realized in actual hardware and software.
B) Personal computers were invented.
C) The Domain Name System was introduced.
D) NSF privatized the operation of the Internet's backbone.
Answer: D
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
3) During which phase of the development of the Internet was the Domain Name System (DNS) introduced?
A) commercialization phase
B) institutional phase
C) innovation phase
D) consolidation phase
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
4) Which of the following is not one of the basic technological foundations of the Internet?
A) client/server computing
B) FTP
C) TCP/IP
D) packet switching
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
5) The process of slicing digital messages into parcels, sending them along different communication paths as they become available, and reassembling them at the destination point is called:
A) routing.
B) the Transmission Control Protocol.
C) packet switching.
D) the File Transfer Protocol.
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
6) Which of the following is the core communications protocol for the Internet?
A) Telnet
B) FTP
C) TCP/IP
D) TLS
Answer: C
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
7) The Transport Layer of TCP/IP is responsible for which of the following?
A) placing packets on and receiving them from the network medium
B) addressing, packaging, and routing messages
C) providing communication with the application by acknowledging and sequencing the packets to and from the application
D) providing a variety of applications with the ability to access the services of the lower layers
Answer: C
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
8) The Internet Layer of TCP/IP is responsible for which of the following?
A) placing packets on and receiving them from the network medium
B) addressing, packaging, and routing messages
C) providing communication with the application by acknowledging and sequencing the packets to and from the application
D) providing a variety of applications with the ability to access the services of the lower layers
Answer: B
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
9) An IPv4 address is expressed as a:
A) 32-bit number that appears as a series of four separate numbers separated by semicolons.
B) 64-bit number that appears as a series of four separate numbers separated by semicolons.
C) 64-bit number that appears as a series of four separate numbers separated by periods.
D) 32-bit number that appears as a series of four separate numbers separated by periods.
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
10) The ________ allows a natural language expression, such as Google.com to represent a numeric IP address.
A) uniform resource locator system
B) Internet protocol addressing schema
C) domain name system
D) assigned numbers and names (ANN) system
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
11) The address used by a browser to identify the location of content on the Web is called:
A) a domain name.
B) a uniform resource locator.
C) an IP address.
D) a file path.
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
12) Which of the following is not an advantage of client/server computing over centralized mainframe computing?
A) It is easy to expand capacity by adding servers and clients.
B) Each client added to the network increases the network's overall capacity and transmission speeds.
C) Client/server networks are less vulnerable, in part because the processing load is balanced over many powerful smaller computers rather than concentrated in a single huge computer.
D) There is less risk that a system will completely malfunction because backup or mirror servers can pick up the slack if one server goes down.
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
13) ________ is a model of computing in computer processing, storage, software, and other services which are provided as a shared pool of virtualized resources over the Internet.
A) Client/server computing
B) P2P computing
C) Mobile computing
D) Cloud computing
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
14) Which of the following protocols is used to send mail to a server?
A) SMTP
B) FTP
C) HTTP
D) SSL
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
15) Where does TLS operate within TCP/IP?
A) between the Internet Layer and the Transport Layer
B) between the Transport Layer and the Application Layer
C) between the Network Interface Layer and the Transport Layer
D) between the Internet Layer and the Application Layer
Answer: B
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
16) Which of the following statements about cloud computing is not true?
A) A public cloud is typically used by companies with stringent privacy and security requirements.
B) Dropbox is an example of a public cloud.
C) Hybrid clouds offer both public and private cloud options.
D) A private cloud may be hosted internally or externally.
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
17) ________ is used to allow remote login on another computer.
A) Telnet
B) FTP
C) HTTP
D) SSL
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
18) ________ is a utility program that allows you to check the connection between your client and a TCP/IP network.
A) Ping
B) Telnet
C) Tracert
D) Finger
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
19) Which of the following technologies has enabled the Internet to grow exponentially to support millions of users, without overloading the network architecture?
A) fiber optics
B) Wi-Fi
C) IPv6
D) client/server computing
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
20) Which of the following are specialized computers that transmit message parcels along available Internet communication paths and on to their destinations?
A) routers
B) Web servers
C) IP servers
D) packet servers
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
21) Which of the following is a set of rules for transferring data?
A) protocol
B) packet
C) router
D) IP address
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
22) Which of the following is not a basic type of cloud computing service?
A) IaaS
B) PaaS
C) SaaS
D) FiOS
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
23) Which of the following are central directories that list all domain names currently in use for specific domains?
A) Web servers
B) root servers
C) client servers
D) DNS servers
Answer: B
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
24) Which of the following was the original purpose of the Internet?
A) to provide a network that would allow businesses to connect with consumers
B) to link large mainframe computers on different college campuses
C) to develop a military communications system that could withstand nuclear war
D) to enable government agencies to track civilian communications
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
25) Which of the following is a utility program that allows you to track the path of a message sent from a client computer to a remote computer on the Internet?
A) Telnet
B) Ping
C) IMAP
D) Tracert
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
26) Which of the following protocols enables the exchange of routing information among different autonomous systems on the Internet?
A) HTTP
B) BGP
C) FTP
D) SMTP
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
27) The term latency refers to a delay that can be experienced in packet-switched networks.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
28) FTP is the protocol that permits users to transfer files from a server to their client computer, and vice versa.
Answer: TRUE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
29) IMAP is the Internet protocol used by a browser to transfer web pages.
Answer: FALSE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
30) A private cloud is operated for the benefit of multiple firms.
Answer: FALSE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
31) Amazon Web Services is an example of a private cloud.
Answer: FALSE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
32) HTTP/2 is supported by almost all the leading web browsers.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
33) In a hybrid cloud computing model, firms use their own infrastructure for their most essential core activities.
Answer: TRUE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
34) What are the essential characteristics of cloud computing?
Answer: The U.S. National Institute of Standards and Technology (NIST) defines cloud computing as having the following essential characteristics: on-demand self-service (consumers can obtain computing capabilities such as server time or network storage as needed automatically on their own); ubiquitous network access (cloud resources can be accessed using standard network and Internet devices, including mobile platforms); Location-independent resource pooling (the pooling of computing resources to serve multiple users, with different virtual resources dynamically assigned according to user demand); rapid elasticity (computing resources can be rapidly provisioned, increased, or decreased to meet changing user demand); and measured service (charges for cloud resources are based on the amount of resources actually used).
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
35) What are the implications of cloud computing for e-commerce?
Answer: Cloud computing has many significant implications for e-commerce. For e-commerce firms, cloud computing radically reduces the cost of building and operating websites because the necessary hardware infrastructure and software can be licensed as a service from cloud service providers at a fraction of the cost of purchasing these services as products. This means firms can adopt "pay-as-you-go" and "pay-as-you-grow" strategies when building out their websites. For instance, according to Amazon, hundreds of thousands of customers use Amazon Web Services. For individuals, cloud computing means you no longer need a powerful laptop or desktop computer to engage in e-commerce or other activities. Instead, you can use much less-expensive tablet computers or smartphones that cost far less. For corporations, cloud computing means that a significant part of hardware and software costs (infrastructure costs) can be reduced because firms can obtain these services online for a fraction of the cost of owning, and they don't have to hire an IT staff to support the infrastructure.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
36) Explain each of the three important concepts behind the Federal Networking Council's definition of the term Internet. Explain how each technology contributes to the functioning of the Internet today.
Answer: The three important concepts in the Federal Networking Council's definition of the Internet are packet switching, the TCP/IP communications protocol, and client/server computing.
Packet switching is a method of slicing digital messages up into parcels that are sent along different communications paths as they become available. The packets travel from router computer to router computer and are then reassembled at their destination point. These routers are special purpose computers that interconnect the thousands of computer networks that make up the Internet. Since this method does not require a dedicated circuit, it makes use of any available spare capacity on any one of several hundred circuits enabling nearly full use of available communication lines and capacity.
Transmission Control Protocol/Internet Protocol (TCP/IP) is the universally agreed upon method for breaking the messages up, routing them to their destination, and reassembling them. The TCP protocol, or set of rules, specifies how messages should be formatted, ordered, compressed, and error-checked. It also stipulates which method the network will use to indicate that they have stopped sending and/or receiving messages and sometimes specifies the transmission speed as well. The IP protocol provides the addressing scheme for the Internet. Each computer connected to the Internet must be assigned an Internet Protocol address so that it can send and receive TCP packets. At present, each time home users sign on to the Internet they are temporarily assigned an IP address by their ISP.
Client/server computing involves very powerful personal computers connected in a network along with one or more server computers. These client computers can display rich graphics, store large files, and process graphic and sound files. The server computers are specifically allocated to common functions that all client computers need such as storing files and supplying software applications, and utility programs.
Difficulty: Difficult
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
37) Which of the following organizations monitor Internet policies and practices?
A) IETF
B) ISOC
C) W3C
D) ICANN
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.2: Explain the current structure of the Internet.
38) TCP/IP operates in which layer of Internet architecture?
A) Network Technology Substrate layer
B) Middleware Services layer
C) Transport Services and Representation Standards layer
D) Applications layer
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
39) The Web runs in which layer of Internet architecture?
A) Network Technology Substrate layer
B) Middleware Services layer
C) Transport Services and Representation Standards layer
D) Applications layer
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
40) The layer of Internet architecture that ties the applications to the communications network and includes security and authentication services is called the:
A) Network Technology Substrate layer.
B) Middleware Services layer.
C) Transport Services and Representation Standards layer.
D) Applications layer.
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
41) The backbone of the Internet is formed by:
A) Internet Exchange Points (IXPs).
B) Tier 1 ISPs.
C) Network Access Points (NAPs).
D) Metropolitan Area Exchanges (MAEs).
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
42) When talking about the physical elements of the Internet, the term redundancy refers to:
A) transmitting multiple copies of a single packet to safeguard against data loss.
B) the use of tiered high-speed switching computers to connect the backbone to regional and local networks.
C) delays in messages caused by the uneven flow of information through the network.
D) multiple duplicate devices and paths in a network built so that data can be rerouted if a breakdown occurs.
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
43) The ________ is a consortium of corporations, government agencies, and nonprofit organizations that monitors Internet policies and practices.
A) Internet Engineering Steering Group (IESG)
B) World Wide Web Consortium (W3C)
C) Internet Engineering Task Force (IETF)
D) Internet Society (ISOC)
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.2: Explain the current structure of the Internet.
44) The ________ helps define the overall structure of the Internet.
A) IAB
B) IESG
C) W3C
D) ITU
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.2: Explain the current structure of the Internet.
45) Which of the following is not true about the mobile platform?
A) Most smartphones use Intel chips.
B) Smartphones and tablet computers are the primary means to access the Internet, both in the United States and worldwide.
C) Most smartphones use either Google's Android or Apple's iOS operating systems.
D) Smartphones use flash memory chips.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 3.2: Explain the current structure of the Internet.
46) Which of the following organizations involved with Internet governance has the United States recently given up control over?
A) ICANN
B) IGF
C) NTIA
D) IANA
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.2: Explain the current structure of the Internet.
47) In the United States, about ________ of Internet traffic now occurs over Internet Protocol version 6 (IPv6).
A) 10%
B) 15%
C) 25%
D) 40%
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.
48) The major hubs in the United States where the Internet backbone intersects with regional and local networks are now commonly referred to as Internet Exchange Points (IXPs).
Answer: TRUE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
49) T1 and T3 refer to international telephone standards for digital communication.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
50) Bluetooth is a high-speed, fixed broadband wireless local area network for commercial and residential use.
Answer: FALSE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
51) Tier 1 ISPs provide Internet access to consumers and businesses.
Answer: FALSE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
52) Identify and describe the two types of ISP service, along with the Internet connection methods, in use today.
Answer: There are two types of ISP service: narrowband and broadband. Narrowband service is the traditional telephone modem connection now operating at 56.6 Kbps (although the actual throughput hovers around 30 Kbps due to line noise that causes extensive resending of packets). This used to be the most common form of connection worldwide but has been replaced by broadband connections in most of the United States, Europe, and Asia.
Broadband service is based on DSL, cable modem, telephone (T1 and T3 lines), and satellite technologies. Broadband — in the context of Internet service — refers to any communication technology that permits clients to play streaming audio and video files at acceptable speeds — generally anything above .5 Mbps.
Digital Subscriber Line (DSL) service is a telephone technology for delivering high-speed access to the Internet through ordinary telephone lines found in a home or business. Cable Internet refers to a cable television technology that provides digital access to the Internet using the same analog or digital video cable providing television signals to a home. T1 and T3 are international telephone standards for digital communication. These are leased, dedicated, guaranteed lines suitable for corporations, government agencies, and businesses such as ISPs requiring high-speed guaranteed service levels. Additionally, some satellite companies offer high-speed broadband Internet access primarily to homes and offices located in rural areas where DSL or cable Internet access is not available. Access speeds and monthly costs are comparable to DSL and cable.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.2: Explain the current structure of the Internet.
53) You are browsing the Web on your tablet computer. Describe the web page data path from its origination point on a distant computer to your tablet.
Answer: The web page information starts from where it is hosted on a web server and travels through the host company's network to the Internet. On the Internet, the data will pass through the ISP's network to regional and national backbones, and finally to the network of the ISP that is serving my personal network, and through an access point or hot spot to be delivered wirelessly to my tablet.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.2: Explain the current structure of the Internet.
54) Which of the following is not a concern about IoT?
A) the falling cost of sensors
B) interoperability
C) security
D) privacy
Answer: A
Difficulty: Easy
AACSB: Information technology
Learning Objective: 33.2: Explain the current structure of the Internet.
55) What type of Internet access technology are Google and Facebook hoping to use to provide Internet access to remote parts of the world?
A) Bluetooth
B) drones
C) WLANs
D) EDI
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
56) Which of the following statements about fiber-optic cable is not true?
A) It transmits more data at faster speeds than coaxial or twisted pair cable.
B) It is thinner and lighter than coaxial or twisted pair cable.
C) Most U.S. homes have fiber connections.
D) Long-haul fiber optic networks are typically owned by firms referred to as Tier I ISPs.
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
57) The major technologies used with wireless local area networks are:
A) Wi-Fi and Bluetooth.
B) Wi-Fi and WiMax.
C) Bluetooth and 3G.
D) WiMax and 3G.
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
58) Which of the following IEEE standards provide for high-speed short-range Wi-Fi?
A) 802.11ad
B) 802.11ay
C) 802.11ah
D) 802.11af
Answer: A
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
59) All of the following are involved in the effort to create standards for IoT except:
A) AllSeen Alliance.
B) Industrial Internet Consortium.
C) Open Connectivity Foundation.
D) W3C.
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
60) All of the following either currently, or have plans to, offer Internet access via satellite except:
A) Facebook
B) Dish
C) Microsoft
D) Boeing
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
61) Microsoft's pilot program to provide broadband Internet access to rural areas uses which of the following technologies?
A) satellites
B) drones
C) unused, low-powered television channels
D) high altitude balloons
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
62) The United States has the world’s highest average Internet connection speed.
Answer: FALSE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
63) WLAN-based Internet access derives from the same technological foundations as telephone-based wireless Internet access.
Answer: FALSE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
64) The Internet of Things (IoT) is based on sensors that can collect data and connect to the Internet.
Answer: TRUE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.2: Explain the current structure of the Internet.
65) Describe and discuss 5G.
Answer: 5G is a new cellular standard being developed for high-bandwidth mobile broadband. Although official standards are not expected to be fully rolled out for a few years, 5G is expected to provide for speeds reaching 10 Gbps or more, support for up to 100,000 connections per square kilometer (known as massive machine-to-machine (M2M) connections), and ultra-low latency (less than 10 milliseconds) communications. Full deployment of 5G is expected to take several years, utilizing a new part of the wireless spectrum (shorter millimeter waves in the 30 GHz to 300 GHz range), and including the development of a transmission infrastructure. This proposed infrastructure will utilize tens of thousands of small cell and distributed antenna systems installed on utility poles, as well as additional investments in fiber optic networks. Telecommunications companies are expected to invest up to $5 billion. The first pre-official 5G devices launched in 2018, with more being deployed by 2019.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.2: Explain the current structure of the Internet.
66) What are some of the issues related to the Internet of Things (IoT)?
Answer: Interoperability remains a major concern with IoT. As with many technologies in the early stages of development, many organizations are fighting to create the standards that participants in the market will follow. The AllSeen Alliance, formed by Qualcomm in 2013 with 50 other companies, including Microsoft and Cisco, was one group that hoped to create an open source standard. Membership in the Alliance soared after its initial founding and by 2016, it had over 200 members. Another group, the Open Interconnect Consortium, formed in 2014 by Intel, Broadcom, Dell, and others apparently not happy with the AllSeen effort, also reached over 200 members. In late 2016, these two groups put their differences aside and merged to create the Open Connectivity Foundation.
A different group, the Industrial Internet Consortium, was formed by AT&T, Cisco, GE, IBM, and Intel to focus on engineering standards for industrial assets. As with many other types of Internet-related technology, Google with its Android operating system and Apple with AirPlay wireless streaming protocol may be trying to create their own standards. Other concerns include security and privacy. Security experts believe that IoT devices could potentially be a security disaster, with the potential for malware being spread through a connected network, and difficulty in issuing patches to devices, leaving them vulnerable. Data from standalone smart devices can reveal much personal detail about a consumer's life, and if those devices are all ultimately interconnected, there will be little that is truly private.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.2: Explain the current structure of the Internet.
67) The first web browser to make it possible to view documents on the Web with colored background, images, and animations was:
A) Netscape Navigator.
B) Mosaic.
C) Mozilla.
D) Internet Explorer.
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
68) In the address http://www.company.com/clients.html, which of the following is the top-level domain?
A) .com
B) company.com
C) www
D) http
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
69) You could expect to find all of the following services in a web server software package except:
A) security services.
B) FTP.
C) search engine.
D) an RSS aggregator.
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
70) Which of the following was the most popular web browser as of August 2018?
A) Internet Explorer
B) Safari
C) Chrome
D) Firefox
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
71) The concept behind document formatting had its roots in which of the following?
A) XML
B) SGML
C) HTML
D) GML
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
72) All of the following statements about HTML5 are true except:
A) HTML5 has become the de facto web page development standard.
B) HTML5 is an important tool for both response web design and adaptive web delivery.
C) HTML5 apps work just like web pages.
D) HTML5 stores page content into mobile device hardware rather loading into the browser from a web server.
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
73) HTML defines the structure of a web page.
Answer: TRUE
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.3: Understand how the Web works.
74) Briefly describe the development of the Web including the key players.
Answer: The Web was invented between 1989 and 1991 when Dr. Tim Berners-Lee and his associates at CERN Laboratories built on the ideas of several earlier researchers and developed the initial versions of HTML, HTTP, a web server, and a web browser, the four essential components of the Web. Information being shared on the Web remained text-based until Marc Andreessen and others at NCSA (National Center for Supercomputing Applications) created a web browser with a graphical user interface. This made it possible to view documents on the Web that included colored backgrounds, images, and primitive animations. In 1994 Andreessen and Jim Clark founded Netscape, which created the first commercial browser. In 1995 Microsoft released the first version of Internet Explorer and the Web began to take off.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.3: Understand how the Web works.
75) Cortana is a type of:
A) intelligent digital assistant.
B) widget.
C) gadget.
D) social network.
Answer: A
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
76) Which of the following enables Internet users to communicate with each other, although not in real time?
A) mobile messaging
B) online forum
C) SMS messaging
D) VoIP
Answer: B
Difficulty: Easy
AACSB: Information technology
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
77) Which of the following is not a mobile messaging application?
A) Kik
B) WhatsApp
C) Viber
D) Feedly
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
78) A(n) ________ allows users to easily add and edit content on a web page.
A) wiki
B) podcast
C) blog
D) RSS feed
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
79) The protocol that enables the transmission of voice and other forms of audio communication over the Internet is called:
A) VoIP.
B) IPTP.
C) VTP.
D) IP.
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
80) Why is VoIP considered to be a disruptive technology?
Answer: In the past, voice and fax were the exclusive provenance of the regulated telephone networks. With the convergence of the Internet and telephone, however, this dominance is already starting to change, with local and long-distance telephone providers and cable companies becoming ISPs, and ISPs getting into the phone market. Key players in the VoIP market include independent service providers such as VoIP pioneers Vonage and Skype (now owned by Microsoft), as well as traditional players such as telephone and cable companies that have moved aggressively into the market.
Difficulty: Moderate
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
81) Explain how the Internet and the Web make e-commerce possible. Briefly discuss at least four features or services that support e-commerce.
Answer: The Internet and the Web have made e-commerce possible because they have brought about an extraordinary expansion of digital services to millions of amateur computer users. The Web makes nearly all elements of rich human expression including color, text, images, photos, animations, sound, and video available, creating a unique environment in which to establish a commercial marketplace. Many of the Web's services and features support e-commerce, including communication tools such as e-mail and messaging applications, search engines and streaming media.
E-mail, for example, can be used as a very effective marketing tool. E-commerce sites can buy e-mail lists from various sources and collate them with lists of their current customers to create a targeted advertising message that can be quickly and economically delivered and will produce a creditable response.
Messaging applications such as mobile messaging apps are increasingly being used by companies to market their brands.
Search engines have also become a crucial tool on e-commerce sites, providing a method for customers to quickly locate the product category or a specific product they are looking for.
Streaming media enables online video, music, video, and other large-bandwidth files to be sent to users in a variety of ways that enable the user to play back the files. Web advertisers increasingly use video to attract viewers. Streaming audio and video segments used in online ads and news stories are perhaps the most frequently used streaming services.
Difficulty: Difficult
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
82) Google Cardboard is an example of which of the following?
A) virtual reality
B) artificial intelligence
C) augmented reality
D) chatbot
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.
83) All of the following statements about mobile apps are true except:
A) mobile apps have usurped television as the most popular entertainment medium.
B) iOS apps are cross-platform, open-source applications.
C) over 200 billion apps have been downloaded from the Apple App Store.
D) almost all the top 100 brands have a presence in at least one of the major app stores.
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.5: Understanding the impact of mobile applications.
84) Which of the following is a programming language introduced by Apple specifically for developing iOS applications?
A) Objective-C
B) C
C) C++
D) Swift
Answer: D
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.5: Understanding the impact of mobile applications.
85) Applications for Android operating system-based smartphones are typically written in which of the following?
A) Swift
B) Java
C) ActiveX
D) ColdFusion
Answer: B
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 3.5: Understanding the impact of mobile applications.
Tuesday, January 14, 2020
E-commerce 2019 - Chapter 2 Quiz and Answers
E-commerce 2019: business. technology. society., 15e (Laudon/Traver)
Chapter 2 E-commerce Business Models and Concepts
1) ________ and ________ are typically the most easily identifiable aspects of a company's business model.
A) Market strategy; market opportunity
B) Value proposition; revenue model
C) Competitive advantage; competitive environment
D) Revenue model; market opportunity
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
2) Which of the following uses a subscription revenue model for books?
A) Spotify
B) Amazon Kindle Unlimited
C) Rhapsody
D) Pandora
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
3) Which element of the business model addresses what a firm provides that other firms do not and cannot?
A) competitive environment
B) competitive advantage
C) market strategy
D) value proposition
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
4) Which element of the business model refers to the presence of substitute products in the market?
A) value proposition
B) competitive environment
C) competitive advantage
D) market opportunity
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
5) Which of the following are Amazon's primary value propositions?
A) personalization and customization
B) selection and convenience
C) reduction of price discovery cost
D) management of product delivery
Answer: B
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
6) A firm's ________ describes how a firm will produce a superior return on invested capital.
A) value proposition
B) revenue model
C) market strategy
D) competitive advantage
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
7) Which of the following does not use a subscription revenue model?
A) Apple Music
B) eHarmony
C) Ancestry
D) Twitter
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
8) Stickiness is an important attribute for which of the following revenue models?
A) advertising revenue model
B) subscription revenue model
C) transaction fee revenue model
D) affiliate revenue model
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
9) Which of the following companies uses a transaction fee revenue model?
A) Yahoo
B) E*Trade
C) Twitter
D) Birchbox
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
10) Which of the following is an example of the affiliate revenue model?
A) Scribd
B) eBay
C) L.L. Bean
D) MyPoints
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
11) Which of the following involves a company giving away a certain level of product or service without charge, but then charging a fee for premium levels of the product or service?
A) advertising revenue model
B) subscription revenue model
C) freemium strategy
D) premium strategy
Answer: C
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
12) Which of the following factors is not a significant influence on a company's competitive environment?
A) how many competitors are active
B) what the market share of each competitor is
C) the availability of supportive organizational structures
D) how competitors price their products
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
13) All of the following can be considered a direct competitor of Priceline except:
A) Travelocity.
B) Expedia.
C) Orbitz.
D) ESPN.
Answer: D
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
14) The existence of many competitors in any one market segment may indicate:
A) an untapped market niche.
B) the market is saturated.
C) no one firm has differentiated itself within that market.
D) a market that has already been tried without success.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
15) All of the following can be considered a direct or indirect competitor of Amazon except:
A) eBay.
B) Apple's iTunes Store.
C) Walmart.
D) Priceline.
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
16) A perfect market is one in which:
A) there are no competitive advantages or asymmetries because all firms have equal access to all the factors to production.
B) one firm develops an advantage based on a factor of production that other firms cannot purchase.
C) one participant in the market has more resources than the others.
D) competition is at a minimum, as each niche market within an industry is served by the company with the greatest competitive advantage.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
17) Organizations that typically provide an array of services to startup companies along with a small amount of funding are referred to as:
A) angel investors.
B) crowdfunders.
C) incubators.
D) venture capital investors.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
18) A ________ specifically details how you plan to find customers and to sell your product.
A) sales analysis
B) business plan
C) competitive strategy
D) market strategy
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
19) Which of the following is not a community provider?
A) LinkedIn
B) Facebook
C) Blue Nile
D) Pinterest
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
20) Which of the following is not a variation of the e-tailer business model?
A) bricks-and-clicks
B) virtual merchant
C) market creator
D) manufacturer-direct
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
21) Which of the following is an example of a company using the content provider model?
A) Priceline
B) Netflix
C) Dell
D) eBay
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
22) Which of the following is not an example of the bricks-and-clicks e-tailing business model?
A) Walmart
B) Target
C) Bluefly
D) Staples
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
23) In 2018, the overall retail market in the United States was estimated to be about:
A) $53 trillion.
B) $5.3 trillion.
C) $530 billion.
D) $53 billion.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
24) In general, the key to becoming a successful content provider is to:
A) own the content being provided.
B) own the technology by which content is created, presented, and distributed.
C) provide online content for free.
D) provide other services as well as online content.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
25) Which of the following uses a subscription-based sales revenue model?
A) Yahoo
B) eBay
C) MyPoints
D) Dollar Shave Club
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
26) All of the following may lead to a competitive advantage except:
A) less expensive suppliers.
B) better employees.
C) fewer products.
D) superior products.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
27) Which of the following is an unfair competitive advantage?
A) brand name
B) access to global markets
C) lower product prices
D) superior technology
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
28) Which of the following gives a business model the most credibility with outside investors?
A) the firm's management team
B) the firm's value proposition
C) the firm's market opportunity
D) the firm's market strategy
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
29) Which of the following statements about Foursquare is not true?
A) Foursquare combines a social network business model with location-based technology.
B) Foursquare initially struggled to find profitability.
C) The growth in Foursquare’s revenue since 2015 has been driven primarily by significant increases in the numbers of users of its Swarm app.
D) Foursquare’s users are typically amenable to having their location tracked and their data collected, since tracking users’ location is the express purpose of the app.
Answer: C
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
30) Which type of investor typically becomes interested in a startup company after it has begun generating revenue?
A) incubators
B) angel investors
C) crowdfunders
D) venture capital investors
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
31) Which of the following is another name for a revenue model?
A) business model
B) business strategy
C) financial model
D) financial statements
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
32) All of the following can be considered examples of the market creator business model except:
A) eBay.
B) Priceline.
C) Uber.
D) Twitter.
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
33) ________ is defined by company using its competitive advantage to gain in surrounding markets.
A) Market strategy
B) Differentiation
C) Leverage
D) Focus
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
34) A wealthy individual who invests personal funds in a startup in exchange for an equity share in the business is referred to as a(n):
A) incubator.
B) angel investor.
C) venture capital investor.
D) crowdfunder.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
35) Which of the following is not a key element of an elevator pitch?
A) exit strategy
B) growth metrics
C) legal structure
D) market opportunity
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
36) A value proposition defines how a company's product or service will generate revenue for the firm.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
37) Real markets are imperfect.
Answer: TRUE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
38) Information asymmetries enable some firms to have an edge over others.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
39) Slow followers are sometimes more successful than first movers.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
40) In the subscription revenue model, a company primarily generates income from the display of ads.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
41) The Jumpstart Our Business Startups (JOBS) Act, and issuance of enabling regulations by the Securities and Exchange Commission, allows a start-up company to use crowdfunding to solicit investors to invest in small and early-stage startups.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
42) Why is the management team such an important element of a business model?
Answer: A strong management team gives a model instant credibility to outside investors, immediate market-specific knowledge, and experience in implementing business plans. A strong management team may not be able to salvage a weak business model, but the team should be able to change the model and redefine the business as it becomes necessary.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
43) Who are the e-commerce enablers and why are they important?
Answer: E-commerce enablers provide the hardware, operating system software, networks and communications technology, applications software, web design, consulting services, and other tools required for e-commerce. While these firms may not be conducting e-commerce per se (although in many instances, e-commerce in its traditional sense is in fact one of their sales channels), as a group they have perhaps profited the most from the development of e-commerce.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
44) Define elevator pitch and describe its key elements.
Answer: An elevator pitch is a short two-to-three-minute presentation aimed at convincing investors to invest. The key elements of an elevator pitch are an introduction, in which you state your name and position, your company's name and a tagline in which you compare what your company does to a well-known company; background, in which you state the origin of your idea, and the problem you are trying to solve, the industry size/market opportunity, in which you provide brief facts about the size of the market; revenue model/numbers/growth metrics, in which you provide insight into your company's revenue model and results thus far, how fast it is growing, and early adopters, if there are any; funding, in which you state the amount of funds you are seeking and what it will help you achieve; and finally exit strategy, in which you explain how your investors will achieve a return on their investment.
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
45) Define organizational development and describe its importance in relation to the implementation of a business plan and strategy.
Answer: Organizational development is a plan that describes how the company will organize the work that needs to be accomplished in the business plan or strategy. Typically, work is divided into functional departments, such as production, shipping, marketing, customer support, and finance. Jobs within these functional areas are defined, and then recruitment begins for specific job titles and responsibilities. Typically, in the beginning, generalists who can perform multiple tasks are hired. As the company grows, recruiting becomes more specialized. For instance, at the outset, a business may have one marketing manager. But after two or three years of steady growth, that one marketing position may be broken down into seven separate jobs done by seven individuals.
All firms — new ones in particular — need an organization to efficiently implement their business plans and strategies. Many e-commerce firms and many traditional firms that attempt an e-commerce strategy have failed because they lacked the organizational structures and supportive cultural values required to support new forms of commerce.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
46) First movers often fail because:
A) their competitive advantage is unfair.
B) they lack complementary resources needed to sustain their advantages.
C) they are operating in a perfect market.
D) they fail to leverage their competitive assets.
Answer: B
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
47) All of the following use an advertising revenue model except:
A) Facebook.
B) Yahoo.
C) Google.
D) Walmart.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
48) Which of the following is not considered a portal?
A) Yahoo
B) MSN
C) Amazon
D) AOL
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
49) Portals primarily generate revenue in all of the following ways except:
A) charging advertisers for ad placement.
B) collecting transaction fees.
C) sales of goods.
D) charging subscription fees.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
50) The basic value proposition of community providers is:
A) they offer a fast, convenient one-stop site where users can focus on their most important concerns and interests.
B) they offer consumers valuable, convenient, time-saving, and low-cost alternatives to traditional service providers.
C) they create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact.
D) they increase customers' productivity by helping them get things done faster and more cheaply.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
51) eBay uses all of the following business models except:
A) B2C market creator.
B) C2C market creator.
C) content provider.
D) e-commerce infrastructure provider.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
52) All of the following are business models employed in the online music industry except:
A) subscription.
B) peer-to-peer streaming.
C) download-and-own.
D) cloud streaming.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
53) The financial services, travel services, and job placement services industries typically use the ________ business model.
A) community provider
B) transaction broker
C) market creator
D) e-tailer
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
54) In the ________ business model, a web-based business builds a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices.
A) market creator
B) community provider
C) e-tailer
D) portal
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
55) On-demand service companies are characterized by the free sharing of resources between the company and consumers.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
56) Define and describe the transaction broker business model and discuss the eight components of the business model for this type of B2C firm.
Answer: The transaction broker business model is most commonly found in the financial services, travel services, and job placement services industries. The eight elements of a business model are value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management team.
The primary value proposition for a transaction broker is the saving of time and money. These sites also often provide timely information and opinion. They offer the consumer the opportunity to increase their individual productivity by helping them to get things done faster and more cheaply.
The revenue model for these firms is based upon receiving commissions or transaction fees when a successful business deal is completed. Online stock trading firms receive either a flat fee for each transaction or a fee based on a sliding scale according to the size of the transaction. Job sites charge the employers a listing fee up front, rather than when the position is filled as traditional "head hunter" firms have done.
Market opportunities for transaction brokers in financial services are increasing due to the rising interest in receiving financial planning advice and conducting stock transactions online. Demand is also increasing for job placement help that is national and even global in nature and for purchasing travel services quickly and easily online. However, there is some market resistance due to consumers' fear of loss of privacy and loss of control over their personal financial information.
The competitive environment for financial services has become fierce as new entrants, including the traditional brokerage firms that have now entered the online marketspace, have flooded the market. To compete effectively, online traders must convince consumers that they have superior security and privacy procedures. The number of job placement sites has also multiplied, and the largest sites such as Monster, which have the greatest number of job listings, are the most likely to survive. Consolidation in all transaction broker markets is presently occurring, making the market opportunity and competitive environment for new firms looking to enter the marketspace bleak.
The market strategies for such firms typically include expensive marketing campaigns to convince consumers to switch from their current provider or to choose their company over other more well-established competitors, also a daunting task in the present economic environment.
Achieving a competitive advantage is crucial to firms trying to enter these industries. Possible strategies are to lure well-known names in the industry away from their present positions to head a new endeavor, giving the firm instant credibility in the market. Experienced, knowledgeable, and well-known employees may be able to give a new firm a competitive edge.
New companies may have to start out recruiting a specialized highly skilled staff, with an organizational development plan that is far more advanced than the typical startup. A strong management team will attract investors and convince investors and consumers alike that a new firm has plenty of market-specific knowledge and the experience necessary to implement the business plan.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.2: Describe the major B2C business models.
57) All of the following are examples of business-to-business (B2B) business models except:
A) e-distributors.
B) e-procurement.
C) exchanges.
D) portals.
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
58) What is the primary revenue model for an e-distributor?
A) sales
B) transaction fee
C) advertising
D) subscription
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
59) Amazon Business is an example of which of the following business models?
A) B2B service provider
B) exchange
C) e-distributor
D) industry consortia
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
60) Ariba is an example of a(n)________.
A) e-distributor
B) portal
C) e-procurement firm
D) Industry consortium
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
61) Which of the following may offer its customers value chain management software?
A) e-distributors
B) e-procurement companies
C) exchanges
D) community providers
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
62) Over the past decade, the number of exchanges has:
A) greatly increased.
B) diminished sharply.
C) stayed about the same.
D) increased slowly but steadily.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
63) The Seam is an example of a(n):
A) private industrial network.
B) exchange.
C) industry consortium.
D) e-distributor.
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
64) A ________ marketplace supplies products and services of interest to particular industries.
A) perfect
B) differentiated
C) horizontal
D) vertical
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
65) SaaS and PaaS providers can typically provide services at lower costs through scale economies.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
66) What is a B2B exchange, and what benefits do they offer? Given those benefits, why are they currently only a small part of the overall B2B picture?
Answer: An exchange is an independent digital marketplace where hundreds of suppliers meet a smaller number of very large commercial purchasers. Exchanges are owned by independent, usually entrepreneurial startup firms whose business is making a market, and they generate revenue by charging a commission or fee based on the size of the transactions conducted among trading parties. They usually serve a single vertical industry and focus on the exchange of direct inputs to production and short-term contracts or spot purchasing.
For buyers, B2B exchanges make it possible to gather information, check out suppliers, collect prices, and keep up to date on the latest happenings all in one place. Sellers, on the other hand, benefit from expanded access to buyers. The greater the number of sellers and buyers, the lower the sales cost and the higher the chances of making a sale. In theory, exchanges make it significantly less expensive and time-consuming to identify potential suppliers, customers, and partners, and to do business with each other. As a result, they can lower transaction costs—the cost of making a sale or purchase.
Exchanges can also lower product costs and inventory-carrying costs—the cost of keeping a product on hand in a warehouse. However, B2B exchanges have had a difficult time convincing thousands of suppliers to move into singular digital markets where they face powerful price competition, and an equally difficult time convincing businesses to change their purchasing behavior away from trusted long-term trading partners. As a result, the number of exchanges has fallen significantly.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.3: Describe the major B2B business models.
67) A ________ refers to a competitive strategy in which firms attempt to achieve lower business process costs.
A) strategy of cost competition
B) scope strategy
C) customer intimacy strategy
D) focus/market niche strategy
Answer: A
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
68) Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry but greatly expands the market at the same time?
A) global reach
B) richness
C) interactivity
D) personalization
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
69) Which of the following is not a primary activity in a firm value chain?
A) outbound logistics
B) finance/accounting
C) operations
D) after-sales service
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
70) A ________ is a networked business ecosystem that coordinates a firm's suppliers, distributors, and delivery firms with its own production needs using an Internet-based supply chain management system.
A) value chain
B) value system
C) value web
D) business strategy
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
71) If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would:
A) enable individual customization of the product by consumers.
B) implement a strategy of commoditization.
C) adopt a strategy of cost competition.
D) develop a scope strategy to compete within a narrower market segment.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
72) A strategy designed to compete within a narrow market or product segment is called a ________ strategy.
A) scope
B) differentiation
C) commoditization
D) focus
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
73) ________ technologies are technologies that enable the incremental improvement of products and services.
A) Sustaining
B) Differentiating
C) Disruptive
D) Commodity
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
74) Innovative entrepreneurs and their business firms that destroy existing business models are referred to as:
A) crowdfunders.
B) venture capitalists.
C) disruptors.
D) angel investors.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
75) The term unfit fitness refers to a situation in which employees of a firm have the wrong skills for the current environment.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
76) Scale economies are efficiencies that result from increasing the size of the business.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
77) A company's strong linkages with its customers increase switching costs.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
78) The Internet's universal standard have changed industry structure by increasing barriers to entry and decreasing competition within an industry.
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
79) Interactivity that enables product customization alters industry structure by decreasing the threat of substitutes.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
80) E-commerce has increased price competition in many markets.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
81) Social technologies change industry structure by weakening powerful sales channels and shifts bargaining power to consumers.
Answer: FALSE
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
82) Define the term industry structure and discuss the ways the Internet and e-commerce have changed the five forces that characterize industry structure.
Answer: The term industry structure refers to the general business environment in an industry and is defined by the nature of the players in the industry and their relative bargaining power. It is characterized by five forces: the rivalry among existing competitors, the threat of substitute products, the barriers to entry into the industry, the bargaining power of the suppliers, and the bargaining power of the buyers.
The competitive consequences of technological developments often change the market share positions among the players. New forms of distribution created by new market entrants can completely change the competitive forces in an industry. The Internet, the Web, and e-commerce have affected the structure of different industries in varying, yet often profound ways. In fact, the explosive emergence of the Internet as a major worldwide distribution channel for goods, services, and even for employment is powerfully changing economies, markets, and industry structures. The universal standards of the Internet have lowered the barrier to entry for many industries, bringing a flood of new entrants. Inter-firm rivalry is one area where e-commerce technology has had an impact on most industries.
The major consequence is that every business must become globally competitive, even if it manufactures or sells only within a local or regional market. The Internet has changed the scope of competition from local and regional to national and global, pitting firms that had previously been in separate geographic markets against one another. Consumers of all types of goods have access to global price information, putting pressure on many producers and suppliers in some industries to decrease their prices. On the other hand, it has also presented new opportunities for firms to differentiate their products or services from their competitors, driving prices and profits for those firms up.
The overall positive or negative effect of e-commerce technologies on firm profitability depends on the industry involved. In some industries, particularly those involved with information distribution such as newspapers, magazines, software distributors, music and publishing companies, e-commerce has completely changed the ways of doing business. New online challengers have intensified competition and increased the availability of substitute products.
In general, the bargaining power of consumers has grown relative to the providers, driving prices down and challenging the overall profitability of these industries. In other industries, particularly manufacturing, e-commerce has not greatly changed relationships with consumers but relationships with suppliers have been impacted by the aggregation of markets such as those created by B2B exchanges. Increasingly, manufacturing firms in entire industries have banded together to aggregate purchases, create industrial digital exchanges or marketplaces, and outsource industrial processes in order to obtain better prices from suppliers.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
83) Discuss the implications of each of the unique features of e-commerce technology for the overall business environment.
Answer: The ubiquity of e-commerce creates new marketing channels and expands the size of the overall market. It also creates new efficiencies in industry operations and lowers the costs to firms of sales operations. By reducing the cost of information, the Internet provides each of the key players in the value chain for an industry with new opportunities to maximize their positions by lowering costs and/or raising prices. Manufacturers can develop direct relationships with their customers through their own websites and bypass the costs of distributors and retailers. Distributors can develop highly efficient inventory management systems to reduce their costs, and retailers can develop efficient customer relations management systems to strengthen their service to customers. Customers can use the Web to search for the best quality, prices, and delivery methods, thus reducing their transaction costs and the prices they pay for goods.
The global reach of e-commerce lowers barriers to entry and expands the market at the same time. This lowers the costs of both industry and firm operations through production and sales efficiencies. When the operational efficiency of an entire industry increases, it helps the industry to compete with alternative industries and lowers prices and adds value to consumers.
The universal standards of e-commerce lower barriers to entry while at the same time intensifying competition within an industry. Universal standards also reduce the costs for communications and computing, enabling firms to engage in broad-scope strategies. Communications efficiencies can also enable firms to outsource some primary and secondary activities to specialized, more efficient providers without affecting the consumer. The Internet can also be used to precisely coordinate the steps in the value chain for a firm, thus reducing overall costs.
The richness of e-commerce reduces the strength of powerful distribution channels. It also allows firms to reduce their reliance on traditional sales forces and can enhance post-sales support services.
The interactivity of e-commerce reduces the threat of substitutes through the enhanced use of customization. It also reduces industry and firm costs by enabling differentiation strategies. In their totality, the differentiation features of a product constitute the customer value proposition for a firm. The ability of the Web to personalize the shopping experience and to customize a product to the particular demands of each consumer are the most significant ways in which the interactivity of the Web can be used to differentiate products.
The use of Internet technology to personalize and customize a customer's experience or product reduces threats of substitutions, raises barriers to entry, reduces value chain costs by lessening reliance on sales forces, and enables personalized marketing strategies.
The information density on the Web weakens powerful sales channels, thus shifting bargaining power to the consumer, while also lowering the costs of obtaining, processing, and distributing information about suppliers and consumers.
The use of social technologies shifts programming and editorial decisions to consumers; creates substitute entertainment products; and energizes a large group of new suppliers.
E-commerce firms can also leverage the ubiquitous nature, the global reach, the interactivity, and the information density of the Web to differentiate products and services. Firms can make it possible for consumers to purchase a product from home, work, or on the road, anywhere in the world. They can create web-based experiences with unique interactive content and store and process product information, warranties, and helpful hints to differentiate their product and their firm from the competition.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
84) Define value chain and explain the difference between a firm value chain, an industry value chain, and a value web.
Answer: A value chain is the set of activities performed that transforms raw inputs into final products and services. A firm value chain is the set of activities a firm engages in to create final products from raw inputs. The key steps and support activities in a firm's value chain are inbound logistics, operations, outbound logistics, sales and marketing, and after sales service. With an industry value chain, the chain broadens to include six generic players: suppliers, manufacturers, transporters, distributors, retailers, and customers. A value web coordinates a firm's suppliers with its own production needs using an Internet-based supply chain management system. It is a networked trans-business system that coordinates the value chains of several firms.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
85) Describe the four stages involved in business model disruption.
Answer: In the first disruptive stage, disruptors, often funded by new sources of finance, introduce new products that are less expensive, less capable, and of poorer quality. These early products nevertheless find a niche in a market that incumbents do not serve or are unaware of. In the second stage, disruptors improve their products at a rapid pace, taking advantage of newer technologies at a faster pace than incumbents, expanding their niche market, and eventually attracting a larger customer base from the incumbents' market. In the third stage, the new products and business model become good enough, and even superior to products offered by incumbents. In the fourth stage, incumbent companies lose market share, and either go out of business or are consolidated into other more successful firms that serve a much more limited customer base. Some incumbents survive by finding new customers for their existing product, adopting some of the newer products and business models in separate divisions of their firms, or moving into other often nearby markets.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
Chapter 2 E-commerce Business Models and Concepts
1) ________ and ________ are typically the most easily identifiable aspects of a company's business model.
A) Market strategy; market opportunity
B) Value proposition; revenue model
C) Competitive advantage; competitive environment
D) Revenue model; market opportunity
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
2) Which of the following uses a subscription revenue model for books?
A) Spotify
B) Amazon Kindle Unlimited
C) Rhapsody
D) Pandora
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
3) Which element of the business model addresses what a firm provides that other firms do not and cannot?
A) competitive environment
B) competitive advantage
C) market strategy
D) value proposition
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
4) Which element of the business model refers to the presence of substitute products in the market?
A) value proposition
B) competitive environment
C) competitive advantage
D) market opportunity
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
5) Which of the following are Amazon's primary value propositions?
A) personalization and customization
B) selection and convenience
C) reduction of price discovery cost
D) management of product delivery
Answer: B
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
6) A firm's ________ describes how a firm will produce a superior return on invested capital.
A) value proposition
B) revenue model
C) market strategy
D) competitive advantage
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
7) Which of the following does not use a subscription revenue model?
A) Apple Music
B) eHarmony
C) Ancestry
D) Twitter
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
8) Stickiness is an important attribute for which of the following revenue models?
A) advertising revenue model
B) subscription revenue model
C) transaction fee revenue model
D) affiliate revenue model
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
9) Which of the following companies uses a transaction fee revenue model?
A) Yahoo
B) E*Trade
C) Twitter
D) Birchbox
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
10) Which of the following is an example of the affiliate revenue model?
A) Scribd
B) eBay
C) L.L. Bean
D) MyPoints
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
11) Which of the following involves a company giving away a certain level of product or service without charge, but then charging a fee for premium levels of the product or service?
A) advertising revenue model
B) subscription revenue model
C) freemium strategy
D) premium strategy
Answer: C
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
12) Which of the following factors is not a significant influence on a company's competitive environment?
A) how many competitors are active
B) what the market share of each competitor is
C) the availability of supportive organizational structures
D) how competitors price their products
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
13) All of the following can be considered a direct competitor of Priceline except:
A) Travelocity.
B) Expedia.
C) Orbitz.
D) ESPN.
Answer: D
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
14) The existence of many competitors in any one market segment may indicate:
A) an untapped market niche.
B) the market is saturated.
C) no one firm has differentiated itself within that market.
D) a market that has already been tried without success.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
15) All of the following can be considered a direct or indirect competitor of Amazon except:
A) eBay.
B) Apple's iTunes Store.
C) Walmart.
D) Priceline.
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
16) A perfect market is one in which:
A) there are no competitive advantages or asymmetries because all firms have equal access to all the factors to production.
B) one firm develops an advantage based on a factor of production that other firms cannot purchase.
C) one participant in the market has more resources than the others.
D) competition is at a minimum, as each niche market within an industry is served by the company with the greatest competitive advantage.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
17) Organizations that typically provide an array of services to startup companies along with a small amount of funding are referred to as:
A) angel investors.
B) crowdfunders.
C) incubators.
D) venture capital investors.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
18) A ________ specifically details how you plan to find customers and to sell your product.
A) sales analysis
B) business plan
C) competitive strategy
D) market strategy
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
19) Which of the following is not a community provider?
A) LinkedIn
B) Facebook
C) Blue Nile
D) Pinterest
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
20) Which of the following is not a variation of the e-tailer business model?
A) bricks-and-clicks
B) virtual merchant
C) market creator
D) manufacturer-direct
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
21) Which of the following is an example of a company using the content provider model?
A) Priceline
B) Netflix
C) Dell
D) eBay
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
22) Which of the following is not an example of the bricks-and-clicks e-tailing business model?
A) Walmart
B) Target
C) Bluefly
D) Staples
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
23) In 2018, the overall retail market in the United States was estimated to be about:
A) $53 trillion.
B) $5.3 trillion.
C) $530 billion.
D) $53 billion.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
24) In general, the key to becoming a successful content provider is to:
A) own the content being provided.
B) own the technology by which content is created, presented, and distributed.
C) provide online content for free.
D) provide other services as well as online content.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
25) Which of the following uses a subscription-based sales revenue model?
A) Yahoo
B) eBay
C) MyPoints
D) Dollar Shave Club
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
26) All of the following may lead to a competitive advantage except:
A) less expensive suppliers.
B) better employees.
C) fewer products.
D) superior products.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
27) Which of the following is an unfair competitive advantage?
A) brand name
B) access to global markets
C) lower product prices
D) superior technology
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
28) Which of the following gives a business model the most credibility with outside investors?
A) the firm's management team
B) the firm's value proposition
C) the firm's market opportunity
D) the firm's market strategy
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
29) Which of the following statements about Foursquare is not true?
A) Foursquare combines a social network business model with location-based technology.
B) Foursquare initially struggled to find profitability.
C) The growth in Foursquare’s revenue since 2015 has been driven primarily by significant increases in the numbers of users of its Swarm app.
D) Foursquare’s users are typically amenable to having their location tracked and their data collected, since tracking users’ location is the express purpose of the app.
Answer: C
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
30) Which type of investor typically becomes interested in a startup company after it has begun generating revenue?
A) incubators
B) angel investors
C) crowdfunders
D) venture capital investors
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
31) Which of the following is another name for a revenue model?
A) business model
B) business strategy
C) financial model
D) financial statements
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
32) All of the following can be considered examples of the market creator business model except:
A) eBay.
B) Priceline.
C) Uber.
D) Twitter.
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
33) ________ is defined by company using its competitive advantage to gain in surrounding markets.
A) Market strategy
B) Differentiation
C) Leverage
D) Focus
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
34) A wealthy individual who invests personal funds in a startup in exchange for an equity share in the business is referred to as a(n):
A) incubator.
B) angel investor.
C) venture capital investor.
D) crowdfunder.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
35) Which of the following is not a key element of an elevator pitch?
A) exit strategy
B) growth metrics
C) legal structure
D) market opportunity
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
36) A value proposition defines how a company's product or service will generate revenue for the firm.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
37) Real markets are imperfect.
Answer: TRUE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
38) Information asymmetries enable some firms to have an edge over others.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
39) Slow followers are sometimes more successful than first movers.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
40) In the subscription revenue model, a company primarily generates income from the display of ads.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
41) The Jumpstart Our Business Startups (JOBS) Act, and issuance of enabling regulations by the Securities and Exchange Commission, allows a start-up company to use crowdfunding to solicit investors to invest in small and early-stage startups.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
42) Why is the management team such an important element of a business model?
Answer: A strong management team gives a model instant credibility to outside investors, immediate market-specific knowledge, and experience in implementing business plans. A strong management team may not be able to salvage a weak business model, but the team should be able to change the model and redefine the business as it becomes necessary.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
43) Who are the e-commerce enablers and why are they important?
Answer: E-commerce enablers provide the hardware, operating system software, networks and communications technology, applications software, web design, consulting services, and other tools required for e-commerce. While these firms may not be conducting e-commerce per se (although in many instances, e-commerce in its traditional sense is in fact one of their sales channels), as a group they have perhaps profited the most from the development of e-commerce.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
44) Define elevator pitch and describe its key elements.
Answer: An elevator pitch is a short two-to-three-minute presentation aimed at convincing investors to invest. The key elements of an elevator pitch are an introduction, in which you state your name and position, your company's name and a tagline in which you compare what your company does to a well-known company; background, in which you state the origin of your idea, and the problem you are trying to solve, the industry size/market opportunity, in which you provide brief facts about the size of the market; revenue model/numbers/growth metrics, in which you provide insight into your company's revenue model and results thus far, how fast it is growing, and early adopters, if there are any; funding, in which you state the amount of funds you are seeking and what it will help you achieve; and finally exit strategy, in which you explain how your investors will achieve a return on their investment.
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.1: Identify the key components of e-commerce business models.
45) Define organizational development and describe its importance in relation to the implementation of a business plan and strategy.
Answer: Organizational development is a plan that describes how the company will organize the work that needs to be accomplished in the business plan or strategy. Typically, work is divided into functional departments, such as production, shipping, marketing, customer support, and finance. Jobs within these functional areas are defined, and then recruitment begins for specific job titles and responsibilities. Typically, in the beginning, generalists who can perform multiple tasks are hired. As the company grows, recruiting becomes more specialized. For instance, at the outset, a business may have one marketing manager. But after two or three years of steady growth, that one marketing position may be broken down into seven separate jobs done by seven individuals.
All firms — new ones in particular — need an organization to efficiently implement their business plans and strategies. Many e-commerce firms and many traditional firms that attempt an e-commerce strategy have failed because they lacked the organizational structures and supportive cultural values required to support new forms of commerce.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.1: Identify the key components of e-commerce business models.
46) First movers often fail because:
A) their competitive advantage is unfair.
B) they lack complementary resources needed to sustain their advantages.
C) they are operating in a perfect market.
D) they fail to leverage their competitive assets.
Answer: B
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.1: Identify the key components of e-commerce business models.
47) All of the following use an advertising revenue model except:
A) Facebook.
B) Yahoo.
C) Google.
D) Walmart.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
48) Which of the following is not considered a portal?
A) Yahoo
B) MSN
C) Amazon
D) AOL
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
49) Portals primarily generate revenue in all of the following ways except:
A) charging advertisers for ad placement.
B) collecting transaction fees.
C) sales of goods.
D) charging subscription fees.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
50) The basic value proposition of community providers is:
A) they offer a fast, convenient one-stop site where users can focus on their most important concerns and interests.
B) they offer consumers valuable, convenient, time-saving, and low-cost alternatives to traditional service providers.
C) they create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact.
D) they increase customers' productivity by helping them get things done faster and more cheaply.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
51) eBay uses all of the following business models except:
A) B2C market creator.
B) C2C market creator.
C) content provider.
D) e-commerce infrastructure provider.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
52) All of the following are business models employed in the online music industry except:
A) subscription.
B) peer-to-peer streaming.
C) download-and-own.
D) cloud streaming.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
53) The financial services, travel services, and job placement services industries typically use the ________ business model.
A) community provider
B) transaction broker
C) market creator
D) e-tailer
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
54) In the ________ business model, a web-based business builds a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices.
A) market creator
B) community provider
C) e-tailer
D) portal
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
55) On-demand service companies are characterized by the free sharing of resources between the company and consumers.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.2: Describe the major B2C business models.
56) Define and describe the transaction broker business model and discuss the eight components of the business model for this type of B2C firm.
Answer: The transaction broker business model is most commonly found in the financial services, travel services, and job placement services industries. The eight elements of a business model are value proposition, revenue model, market opportunity, competitive environment, competitive advantage, market strategy, organizational development, and management team.
The primary value proposition for a transaction broker is the saving of time and money. These sites also often provide timely information and opinion. They offer the consumer the opportunity to increase their individual productivity by helping them to get things done faster and more cheaply.
The revenue model for these firms is based upon receiving commissions or transaction fees when a successful business deal is completed. Online stock trading firms receive either a flat fee for each transaction or a fee based on a sliding scale according to the size of the transaction. Job sites charge the employers a listing fee up front, rather than when the position is filled as traditional "head hunter" firms have done.
Market opportunities for transaction brokers in financial services are increasing due to the rising interest in receiving financial planning advice and conducting stock transactions online. Demand is also increasing for job placement help that is national and even global in nature and for purchasing travel services quickly and easily online. However, there is some market resistance due to consumers' fear of loss of privacy and loss of control over their personal financial information.
The competitive environment for financial services has become fierce as new entrants, including the traditional brokerage firms that have now entered the online marketspace, have flooded the market. To compete effectively, online traders must convince consumers that they have superior security and privacy procedures. The number of job placement sites has also multiplied, and the largest sites such as Monster, which have the greatest number of job listings, are the most likely to survive. Consolidation in all transaction broker markets is presently occurring, making the market opportunity and competitive environment for new firms looking to enter the marketspace bleak.
The market strategies for such firms typically include expensive marketing campaigns to convince consumers to switch from their current provider or to choose their company over other more well-established competitors, also a daunting task in the present economic environment.
Achieving a competitive advantage is crucial to firms trying to enter these industries. Possible strategies are to lure well-known names in the industry away from their present positions to head a new endeavor, giving the firm instant credibility in the market. Experienced, knowledgeable, and well-known employees may be able to give a new firm a competitive edge.
New companies may have to start out recruiting a specialized highly skilled staff, with an organizational development plan that is far more advanced than the typical startup. A strong management team will attract investors and convince investors and consumers alike that a new firm has plenty of market-specific knowledge and the experience necessary to implement the business plan.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.2: Describe the major B2C business models.
57) All of the following are examples of business-to-business (B2B) business models except:
A) e-distributors.
B) e-procurement.
C) exchanges.
D) portals.
Answer: D
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
58) What is the primary revenue model for an e-distributor?
A) sales
B) transaction fee
C) advertising
D) subscription
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
59) Amazon Business is an example of which of the following business models?
A) B2B service provider
B) exchange
C) e-distributor
D) industry consortia
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
60) Ariba is an example of a(n)________.
A) e-distributor
B) portal
C) e-procurement firm
D) Industry consortium
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
61) Which of the following may offer its customers value chain management software?
A) e-distributors
B) e-procurement companies
C) exchanges
D) community providers
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
62) Over the past decade, the number of exchanges has:
A) greatly increased.
B) diminished sharply.
C) stayed about the same.
D) increased slowly but steadily.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
63) The Seam is an example of a(n):
A) private industrial network.
B) exchange.
C) industry consortium.
D) e-distributor.
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
64) A ________ marketplace supplies products and services of interest to particular industries.
A) perfect
B) differentiated
C) horizontal
D) vertical
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
65) SaaS and PaaS providers can typically provide services at lower costs through scale economies.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.3: Describe the major B2B business models.
66) What is a B2B exchange, and what benefits do they offer? Given those benefits, why are they currently only a small part of the overall B2B picture?
Answer: An exchange is an independent digital marketplace where hundreds of suppliers meet a smaller number of very large commercial purchasers. Exchanges are owned by independent, usually entrepreneurial startup firms whose business is making a market, and they generate revenue by charging a commission or fee based on the size of the transactions conducted among trading parties. They usually serve a single vertical industry and focus on the exchange of direct inputs to production and short-term contracts or spot purchasing.
For buyers, B2B exchanges make it possible to gather information, check out suppliers, collect prices, and keep up to date on the latest happenings all in one place. Sellers, on the other hand, benefit from expanded access to buyers. The greater the number of sellers and buyers, the lower the sales cost and the higher the chances of making a sale. In theory, exchanges make it significantly less expensive and time-consuming to identify potential suppliers, customers, and partners, and to do business with each other. As a result, they can lower transaction costs—the cost of making a sale or purchase.
Exchanges can also lower product costs and inventory-carrying costs—the cost of keeping a product on hand in a warehouse. However, B2B exchanges have had a difficult time convincing thousands of suppliers to move into singular digital markets where they face powerful price competition, and an equally difficult time convincing businesses to change their purchasing behavior away from trusted long-term trading partners. As a result, the number of exchanges has fallen significantly.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 2.3: Describe the major B2B business models.
67) A ________ refers to a competitive strategy in which firms attempt to achieve lower business process costs.
A) strategy of cost competition
B) scope strategy
C) customer intimacy strategy
D) focus/market niche strategy
Answer: A
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
68) Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry but greatly expands the market at the same time?
A) global reach
B) richness
C) interactivity
D) personalization
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
69) Which of the following is not a primary activity in a firm value chain?
A) outbound logistics
B) finance/accounting
C) operations
D) after-sales service
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
70) A ________ is a networked business ecosystem that coordinates a firm's suppliers, distributors, and delivery firms with its own production needs using an Internet-based supply chain management system.
A) value chain
B) value system
C) value web
D) business strategy
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
71) If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would:
A) enable individual customization of the product by consumers.
B) implement a strategy of commoditization.
C) adopt a strategy of cost competition.
D) develop a scope strategy to compete within a narrower market segment.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
72) A strategy designed to compete within a narrow market or product segment is called a ________ strategy.
A) scope
B) differentiation
C) commoditization
D) focus
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
73) ________ technologies are technologies that enable the incremental improvement of products and services.
A) Sustaining
B) Differentiating
C) Disruptive
D) Commodity
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
74) Innovative entrepreneurs and their business firms that destroy existing business models are referred to as:
A) crowdfunders.
B) venture capitalists.
C) disruptors.
D) angel investors.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
75) The term unfit fitness refers to a situation in which employees of a firm have the wrong skills for the current environment.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
76) Scale economies are efficiencies that result from increasing the size of the business.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
77) A company's strong linkages with its customers increase switching costs.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
78) The Internet's universal standard have changed industry structure by increasing barriers to entry and decreasing competition within an industry.
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
79) Interactivity that enables product customization alters industry structure by decreasing the threat of substitutes.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
80) E-commerce has increased price competition in many markets.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
81) Social technologies change industry structure by weakening powerful sales channels and shifts bargaining power to consumers.
Answer: FALSE
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
82) Define the term industry structure and discuss the ways the Internet and e-commerce have changed the five forces that characterize industry structure.
Answer: The term industry structure refers to the general business environment in an industry and is defined by the nature of the players in the industry and their relative bargaining power. It is characterized by five forces: the rivalry among existing competitors, the threat of substitute products, the barriers to entry into the industry, the bargaining power of the suppliers, and the bargaining power of the buyers.
The competitive consequences of technological developments often change the market share positions among the players. New forms of distribution created by new market entrants can completely change the competitive forces in an industry. The Internet, the Web, and e-commerce have affected the structure of different industries in varying, yet often profound ways. In fact, the explosive emergence of the Internet as a major worldwide distribution channel for goods, services, and even for employment is powerfully changing economies, markets, and industry structures. The universal standards of the Internet have lowered the barrier to entry for many industries, bringing a flood of new entrants. Inter-firm rivalry is one area where e-commerce technology has had an impact on most industries.
The major consequence is that every business must become globally competitive, even if it manufactures or sells only within a local or regional market. The Internet has changed the scope of competition from local and regional to national and global, pitting firms that had previously been in separate geographic markets against one another. Consumers of all types of goods have access to global price information, putting pressure on many producers and suppliers in some industries to decrease their prices. On the other hand, it has also presented new opportunities for firms to differentiate their products or services from their competitors, driving prices and profits for those firms up.
The overall positive or negative effect of e-commerce technologies on firm profitability depends on the industry involved. In some industries, particularly those involved with information distribution such as newspapers, magazines, software distributors, music and publishing companies, e-commerce has completely changed the ways of doing business. New online challengers have intensified competition and increased the availability of substitute products.
In general, the bargaining power of consumers has grown relative to the providers, driving prices down and challenging the overall profitability of these industries. In other industries, particularly manufacturing, e-commerce has not greatly changed relationships with consumers but relationships with suppliers have been impacted by the aggregation of markets such as those created by B2B exchanges. Increasingly, manufacturing firms in entire industries have banded together to aggregate purchases, create industrial digital exchanges or marketplaces, and outsource industrial processes in order to obtain better prices from suppliers.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
83) Discuss the implications of each of the unique features of e-commerce technology for the overall business environment.
Answer: The ubiquity of e-commerce creates new marketing channels and expands the size of the overall market. It also creates new efficiencies in industry operations and lowers the costs to firms of sales operations. By reducing the cost of information, the Internet provides each of the key players in the value chain for an industry with new opportunities to maximize their positions by lowering costs and/or raising prices. Manufacturers can develop direct relationships with their customers through their own websites and bypass the costs of distributors and retailers. Distributors can develop highly efficient inventory management systems to reduce their costs, and retailers can develop efficient customer relations management systems to strengthen their service to customers. Customers can use the Web to search for the best quality, prices, and delivery methods, thus reducing their transaction costs and the prices they pay for goods.
The global reach of e-commerce lowers barriers to entry and expands the market at the same time. This lowers the costs of both industry and firm operations through production and sales efficiencies. When the operational efficiency of an entire industry increases, it helps the industry to compete with alternative industries and lowers prices and adds value to consumers.
The universal standards of e-commerce lower barriers to entry while at the same time intensifying competition within an industry. Universal standards also reduce the costs for communications and computing, enabling firms to engage in broad-scope strategies. Communications efficiencies can also enable firms to outsource some primary and secondary activities to specialized, more efficient providers without affecting the consumer. The Internet can also be used to precisely coordinate the steps in the value chain for a firm, thus reducing overall costs.
The richness of e-commerce reduces the strength of powerful distribution channels. It also allows firms to reduce their reliance on traditional sales forces and can enhance post-sales support services.
The interactivity of e-commerce reduces the threat of substitutes through the enhanced use of customization. It also reduces industry and firm costs by enabling differentiation strategies. In their totality, the differentiation features of a product constitute the customer value proposition for a firm. The ability of the Web to personalize the shopping experience and to customize a product to the particular demands of each consumer are the most significant ways in which the interactivity of the Web can be used to differentiate products.
The use of Internet technology to personalize and customize a customer's experience or product reduces threats of substitutions, raises barriers to entry, reduces value chain costs by lessening reliance on sales forces, and enables personalized marketing strategies.
The information density on the Web weakens powerful sales channels, thus shifting bargaining power to the consumer, while also lowering the costs of obtaining, processing, and distributing information about suppliers and consumers.
The use of social technologies shifts programming and editorial decisions to consumers; creates substitute entertainment products; and energizes a large group of new suppliers.
E-commerce firms can also leverage the ubiquitous nature, the global reach, the interactivity, and the information density of the Web to differentiate products and services. Firms can make it possible for consumers to purchase a product from home, work, or on the road, anywhere in the world. They can create web-based experiences with unique interactive content and store and process product information, warranties, and helpful hints to differentiate their product and their firm from the competition.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
84) Define value chain and explain the difference between a firm value chain, an industry value chain, and a value web.
Answer: A value chain is the set of activities performed that transforms raw inputs into final products and services. A firm value chain is the set of activities a firm engages in to create final products from raw inputs. The key steps and support activities in a firm's value chain are inbound logistics, operations, outbound logistics, sales and marketing, and after sales service. With an industry value chain, the chain broadens to include six generic players: suppliers, manufacturers, transporters, distributors, retailers, and customers. A value web coordinates a firm's suppliers with its own production needs using an Internet-based supply chain management system. It is a networked trans-business system that coordinates the value chains of several firms.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
85) Describe the four stages involved in business model disruption.
Answer: In the first disruptive stage, disruptors, often funded by new sources of finance, introduce new products that are less expensive, less capable, and of poorer quality. These early products nevertheless find a niche in a market that incumbents do not serve or are unaware of. In the second stage, disruptors improve their products at a rapid pace, taking advantage of newer technologies at a faster pace than incumbents, expanding their niche market, and eventually attracting a larger customer base from the incumbents' market. In the third stage, the new products and business model become good enough, and even superior to products offered by incumbents. In the fourth stage, incumbent companies lose market share, and either go out of business or are consolidated into other more successful firms that serve a much more limited customer base. Some incumbents survive by finding new customers for their existing product, adopting some of the newer products and business models in separate divisions of their firms, or moving into other often nearby markets.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.
E-commerce 2019 - Chapter 1 Quiz and Answers
E-commerce 2019: business. technology. society., 15e (Laudon/Traver)
Chapter 1 The Revolution Is Just Beginning
1) E-commerce can be defined as:
A) digitally enabled commercial transactions between and among organizations and individuals.
B) the use of digital technologies in a firm's daily activities.
C) the digital enablement of transactions and processes within an organization.
D) any electronically based organizational activity that supports a firm’s market exchanges.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
2) Which of the following is an example of e-business?
A) Amazon's inventory control system
B) the Amazon.com website
C) an Amazon mobile app
D) Amazon's Pinterest page
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
3) Which of the following can be considered synonymous with the term e-commerce?
A) e-business
B) digital commerce
C) the Internet
D) the Web
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
4) The term e-commerce refers to the digital enabling of business processes both inside and outside the firm.
Answer: FALSE
Difficulty: Moderate
AACSB: Information Technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
5) E-commerce and e-business systems blur together at the business firm boundary, where internal business systems link up with suppliers or customers.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
6) What is the key factor in determining if a transaction is "commerce"?
Answer: The key factor in determining if a transaction is commerce is the "exchange of value” (e.g., money) across organizational or individual boundaries in return for products and services.
Difficulty: Easy
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
7) Which of the following is not a unique feature of e-commerce technology?
A) interactivity
B) social technology
C) information asymmetry
D) richness
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
8) Which of the following features of e-commerce technology enables merchants to market and sell "complex" goods and services to consumers via marketing messages that can integrate video, audio, and text?
A) richness
B) ubiquity
C) information density
D) personalization
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
9) Which of the following features of e-commerce technology allows users to participate in the creation of online content?
A) ubiquity
B) global reach
C) information density
D) social technology
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
10) Which of the following is the best definition of transaction cost?
A) the expense of changing national or regional prices
B) the cost of participating in a market
C) the cost of finding suitable products in the market
D) the cost merchants pay to bring their goods to market
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
11) The world's online population was estimated to be around ________ in 2018.
A) 360 million
B) 3.6 billion
C) 36 billion
D) 360 billion
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
12) Which of the following features of e-commerce technology is related to the concept of network externalities?
A) richness
B) interactivity
C) universal standards
D) information density
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
13) Which of the following statements is true about the traditional tradeoff between the richness and reach of a marketing message prior to the development of the Web?
A) Marketing messages had little richness.
B) The smaller the audience reached, the less rich the message.
C) The larger the audience reached, the less rich the message.
D) Richness was unrelated to reach.
Answer: C
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
14) Interactivity in the context of e-commerce provides which of the following functionalities?
A) the ability to physically touch and manipulate a product
B) complexity and content of a message
C) the ability of consumers to create and distribute content
D) the enabling of two-way communication between consumer and merchant
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
15) The costs incurred by merchants in having to change product prices (such as the costs of reentering prices into computer systems) are referred to as which of the following?
A) subscription costs
B) fixed costs
C) menu costs
D) variable costs
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
16) Which of the following refers to any disparity in relevant market information among parties in a transaction?
A) information asymmetry
B) unfair competitive advantage
C) imperfect competition
D) dynamic pricing
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
17) Which of the following is a physical place you visit in order to transact?
A) marketspace
B) marketplace
C) social network
D) the Internet
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
18) The total number of users or customers an e-commerce business can obtain is a measure of which of the following?
A) ubiquity
B) interactivity
C) reach
D) information density
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
19) Which of the following refers to the complexity and content of a message?
A) richness
B) reach
C) information density
D) interactivity
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
20) E-commerce is available just about everywhere and anytime. This is known as:
A) richness.
B) information density.
C) ubiquity.
D) reach.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
21) Ubiquity increases the cognitive energy required to transact in a marketspace.
Answer: FALSE
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
22) The fact that e-commerce is conducted based on universal standards decreases search costs for consumers.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
23) Universal standards make price discovery more costly, slower, and less accurate.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
24) Price transparency refers to the ease with which consumers can find out what merchants pay for products.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
25) Personalization involves targeting marketing messages to specific individuals by adjusting the message based upon a consumer's preferences or past purchasing behavior.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
26) E-commerce technologies provide a unique, many-to-many model of mass communication.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
27) Why study e-commerce?
Answer: E-commerce is a disruptive innovation that is different and more powerful than any of the other technologies we have seen in the past century. E-commerce technologies—and the digital markets that result—have brought about some fundamental, unprecedented shifts in commerce. While other technologies transformed economic life in the twentieth century, the evolving Internet and other information technologies are shaping the twenty-first century.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.1: Understand why it is important to study e-commerce.
28) Identify the eight unique features of e-commerce technology and explain how these features set e-commerce apart from more traditional ways of conducting commercial transactions.
Answer: The eight unique features of e-commerce technology are ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, and social technology.
The fact that e-commerce is available nearly everywhere, at any time, (ubiquity) extends the marketplace beyond traditional boundaries and removes it from a temporal and geographic location. A marketspace is created in which shopping can take place anywhere, enhancing consumer convenience and reducing shopping costs, whereas in traditional commerce the marketplace is a physical place you must visit in order to transact.
The global reach of e-commerce means that commerce is enabled across national and cultural boundaries as never before, with potentially billions of consumers and millions of businesses worldwide included in the marketspace. Traditional commerce, by contrast, is local or regional involving local merchants or national merchants with local outlets.
Universal standards (one set of technical media standards) also allow for the seamless enablement of global commerce. In contrast, most traditional commerce technologies differ from one nation to the next. In traditional markets, national sales forces and small retail stores can provide a complex and content-rich message. However, there is generally a trade-off between the richness of the message and the number of consumers who can be reached with the marketing message. In e-commerce the trade-off is no longer necessary.
An information rich environment is extended globally. Unlike any other commercial technology of the twentieth century, except perhaps the telephone, e-commerce technologies are interactive, allowing for two-way communication between the seller and the consumer. E-commerce technologies reduce information collection, storage, processing, and communication costs, thereby greatly increasing the prevalence, accuracy, and timeliness of information. This information density (information that is more plentiful, cheaper, and of higher quality) sets e-commerce apart from all other traditional methods of conducting transactions.
E-commerce technologies also permit the personalization and customization of marketing messages on a level that was impossible with previous commerce technologies. Marketing messages can be targeted to specific individuals based on their interests and past purchasing behavior, and the product or service can be altered to suit a customer's preferences and prior behavior. Social technology allows users to easily generate and share content and permits a many-to-many model of mass communications that is different from previous technologies. This supports the creation of new business models and products that support social network services.
Difficulty: Difficult
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
29) How has e-commerce changed the marketing of goods?
Answer: E-commerce has greatly changed the marketing of goods. Before e-commerce was developed, the marketing and sale of goods was a mass-marketing and sales force-driven process. Marketers viewed consumers as passive targets of advertising campaigns. E-commerce has brought many new possibilities for marketing. The Internet and Web can deliver, to an audience of millions, rich marketing messages with text, video, and audio in a way not possible with traditional commerce technologies such as radio, television, or magazines. Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. In addition, much information about the consumer can be gathered from the website the consumer visits. With the increase in information density, a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. The result is a level of personalization and customization unthinkable with existing commerce technologies.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
30) Which type of e-commerce is distinguished by the type of technology used in the transaction rather than by the nature of the market relationship?
A) consumer-to-consumer (C2C)
B) social e-commerce
C) mobile e-commerce
D) business-to-business (B2B)
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
31) Which of the following is a leading platform for social e-commerce?
A) Amazon
B) eBay
C) Wikipedia
D) Facebook
Answer: D
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
32) Business-to-consumer (B2C) e-commerce in the United States:
A) grew at double-digit rates between 2010 and 2018.
B) has less revenue than C2C e-commerce.
C) now constitutes over 50% of the overall U.S. retail market.
D) is growing more slowly as it confronts its own fundamental limitations.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
33) Which of the following is not true about the use of apps?
A) Users spend nearly 90% of their smartphone app minutes using their top five apps.
B) Users still spend less time using apps than they do using desktops or mobile websites.
C) Apps are easier to control and monetize than websites.
D) Users typically use about 20 different apps per month.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
34) Which of the following is an example of an on-demand service company?
A) YouTube
B) Airbnb
C) Tumblr
D) Facebook
Answer: B
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 1.4: Describe the major types of e-commerce.
35) Which of the following is a platform for B2B e-commerce?
A) Airbnb
B) Facebook
C) Groupon
D) Go2Paper
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
36) All of the following are platforms for C2C e-commerce except:
A) Walmart
B) Facebook Marketplace
C) Craigslist
D) Etsy
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
37) All of the following are examples of social networks except:
A) Instagram.
B) Twitter.
C) Y Combinator.
D) Pinterest.
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
38) B2B e-commerce is the largest type of e-commerce.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
39) List and briefly explain the main types of e-commerce.
Answer: The main types of e-commerce are business-to-consumer (B2C), in which online businesses attempt to reach individual consumers; business-to-business (B2B), in which businesses focus on selling to other businesses; consumer-to-consumer (C2C), which provides a market in which consumers can sell goods to each other; mobile e-commerce (m-commerce), which refers to the use of wireless digital devices to enable online transactions; social e-commerce, which is commerce enabled by social networks and online social relationships; and local e-commerce, which is e-commerce that is focused on engaging the customer based on his or her geographical location.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.4: Describe the major types of e-commerce.
40) All of the following statements about e-commerce in the United States in 2018 are true except:
A) social e-commerce generated more revenue than mobile e-commerce.
B) mobile advertising accounted for over 70% of all digital advertising spending.
C) on-demand service firms fueled the growth of local e-commerce.
D) growth rates for retail e-commerce were higher in the Middle East than in the United States.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
41) In 2018, about ________ of Americans accessed the Internet solely via a mobile device.
A) 8%
B) 16%
C) 28%
D) 34%
Answer: B
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
42) Which of the following is not a major business trend in e-commerce in 2018-2019?
A) Mobile e-commerce continues to grow.
B) Retail e-commerce revenues exceed B2B e-commerce revenues for the first time.
C) On-demand service companies garner multibillion-dollar valuations.
D) Social e-commerce continues to grow.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
43) Which of the following is not a major technology trend in e-commerce in 2018-2019?
A) Mobile messaging services are now used by almost two-thirds of smartphone users.
B) Firms are turning to business analytics to make sense out of big data.
C) Smart speakers provide an additional platform for e-commerce.
D) Growth of the Internet of Things slows down.
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
44) All of the following are major social trends in e-commerce in 2018-2019 except for:
A) concerns about the flood of temporary, poorly paid jobs without benefits being generated by on-demand service companies.
B) concerns over commercial and governmental privacy invasion.
C) concerns about the U.S. Supreme Court ruling that online businesses do not need to collect state sales tax.
D) concerns about the increasing market dominance of Facebook, Amazon, and Google.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
45) Which of the following statements about the mobile platform is not true?
A) Over 91% of Americans used a mobile device to access the Internet at least some of the time in 2018.
B) Over 220 Americans used tablet computer apps in 2018.
C) M-commerce purchases were expected to reach almost $280 billion in 2018.
D) The time U.S. adults spend using mobile apps accounts for over 60% of total digital minutes spent.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
46) Which of the following describes the basic web policy of large firms during the Invention period?
A) Integrate social networks and the mobile platform with website marketing.
B) Emphasize the necessity for the Web to generate profits.
C) Use the Web to sell complex goods and services online.
D) Maintain a basic, static website depicting the firm's brand.
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
47) It is estimated that by 2022, the size of the B2B market will reach:
A) $730 million.
B) $7.3 billion.
C) $730 billion.
D) $7.3 trillion.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
48) Which of the following statements about the Web is not true?
A) The Web is the technology upon which the Internet is based.
B) The Web was the original "killer app."
C) The Web provides access to pages written in Hypertext Markup Language.
D) The Web is both a communications infrastructure and an information storage system.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
49) In 2018, there were more than ________ Internet hosts.
A) 1 million
B) 10 million
C) 100 million
D) 1 billion
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
50) All of the following can be considered a precursor to e-commerce except:
A) the development of the smartphone.
B) Baxter Healthcare's PC-based remote order entry system.
C) the French Minitel.
D) the development of Electronic Data Interchange standards.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
51) ________ was the first truly large-scale digitally enabled transaction system in the B2C arena.
A) Telex
B) The Baxter Healthcare system
C) The French Minitel
D) Eelectronic Data Interchange (EDI)
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
52) In which year can e-commerce be said to have begun?
A) 1983
B) 1985
C) 1995
D) 2001
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
53) All of the following are issues facing Pinterest except:
A) copyright infringement.
B) inability to retain users.
C) spam.
D) scams.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
54) Which of the following is a characteristic of e-commerce during the Invention period?
A) mobile technology
B) earnings and profit emphasis
C) disintermediation
D) extensive government surveillance
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
55) All of the following are examples of Web 2.0 sites and applications except:
A) photo-sharing sites.
B) blogs.
C) wikis.
D) auction sites.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
56) Which of the following is not a characteristic of a perfect competitive market?
A) Price, cost, and quality information are equally distributed.
B) A nearly infinite set of suppliers compete against one another.
C) Customers have access to all relevant information worldwide.
D) It is highly regulated.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
57) All of the following were visions of e-commerce expressed during the early years of e-commerce except:
A) a nearly perfect information marketspace.
B) friction-free commerce.
C) disintermediation.
D) fast follower advantage.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
58) Unfair competitive advantages occur when:
A) one competitor has an advantage that others cannot purchase.
B) market middlemen are displaced.
C) information is equally distributed and transaction costs are low.
D) firms are able to gather monopoly profits.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
59) The early years of e-commerce were driven by all of the following factors except:
A) an emphasis on exploiting traditional distribution channels.
B) a huge infusion of venture capital funds.
C) an emphasis on quickly achieving very high market visibility.
D) visions of profiting from new technology.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
60) The early years of e-commerce are considered:
A) the most promising time in history for the successful implementation of first mover advantages.
B) an economist's dream come true, where for a brief time, consumers had access to all relevant market information and transaction costs plummeted.
C) a stunning technological success as the Internet and the Web increased from a few thousand to billions of e-commerce transactions per year.
D) a dramatic business success as 85% of dot-coms formed since 1995 became flourishing businesses.
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
61) Which of the following best describes the early years of e-commerce?
A) They were a technological success but a mixed business success.
B) They were a technological success but a business failure.
C) They were a technological failure but a business success.
D) They were a mixed technological and business success.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
62) Which of the following is a characteristic of the Reinvention phase of e-commerce?
A) massive proliferation of dot-com start-ups
B) widespread adoption of broadband networks
C) rapid growth of search engine advertising
D) expansion of e-commerce to include services as well as goods
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
63) Which of the following is a characteristic of the Consolidation phase of e-commerce?
A) predominance of pure online strategies
B) emphasis on revenue growth versus profits
C) brand extension and strengthening becomes more important than creating new brands
D) shift to a technology-driven approach
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
64) Which of the following is not true regarding e-commerce today?
A) Economists' visions of a friction-free market have not been realized.
B) Consumers are less price-sensitive than expected.
C) There remains considerable persistent price dispersion.
D) The market middlemen disappeared.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
65) Which of the following statements is not true?
A) Information asymmetries are continually being introduced by merchants and marketers.
B) Intermediaries have not disappeared.
C) Overall transaction costs have dropped dramatically.
D) Brands remain very important in e-commerce.
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
66) Which of the following is an example of an e-commerce first mover that failed?
A) Etsy
B) eToys
C) eBay
D) E*Trade
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
67) Which of the following refers to the practice of researching a product online before purchasing it at a physical store?
A) zooming
B) grazing
C) showrooming
D) webrooming
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
68) Which of the following was the original "killer app" that made the Internet commercially interesting and extraordinarily popular?
A) e-commerce
B) The Web
C) social networks
D) mobile apps
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
69) Which of the following refers to the displacement of market middlemen and the creation of a new direct relationship between producers and consumers?
A) network effect
B) disintermediation
C) friction-free commerce
D) first mover advantage
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
70) Which of the following is not an element of friction-free commerce?
A) Information is equally distributed.
B) Transaction costs are high.
C) Prices can be dynamically adjusted to reflect actual demand.
D) Unfair competitive advantages are eliminated.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
71) Retail e-commerce in the United States is not expected to continue growing at double-digit growth rates in 2018-2019.
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
72) The Internet is a worldwide system of computer networks.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
73) The Internet has shown similar growth patterns as other electronic technologies of the past.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
74) The emergence of mobile, social, and local e-commerce occurred during the Consolidation period of e-commerce.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
75) The Reinvention period of e-commerce is as much a sociological phenomenon as it is a technological or business phenomenon.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
76) Price dispersion has been eliminated in e-commerce
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
77) What is a first mover? Why was being a first mover considered to be important during the early years of e-commerce?
Answer: First movers are firms who are first to market in a particular area, and who move quickly to gather market share. First movers hope to establish a large customer base quickly, build brand name recognition early, and inhibit competitors by building in switching costs for their customers through proprietary interface designs and features. The thinking was that once customers became accustomed to using a company's unique web interface and feature set, they could not easily be switched to competitors. In the best case, the entrepreneurial firm would invent proprietary technologies and techniques that almost everyone adopted, creating a network effect, which occurs where all participants receive value from the fact that everyone else uses the same tool or product.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
78) Describe the visions and forces during the early days of e-commerce in terms of what the various interest groups hoped for: the computer science and information technology people; the economists; and the entrepreneurs, venture capitalists and marketers. Explain whether what each group envisioned came to fruition and why or why not.
Answer: The computer scientists and information technologists' vision included universal communications and a computing environment that everyone could access with inexpensive computers. Their interest was in creating a vast worldwide information collection from libraries, universities, governments, and scientific institutions that was ungoverned by any nation and free to all. They believed that the Internet, and by extension, the e-commerce that operated within the infrastructure, should be self-governed and self-regulated.
The economists envisioned a near-perfect competitive market where price, cost, and quality information are equally distributed. The marketspace would include a nearly infinite number of suppliers with equal access to hundreds of millions of customers, but where those consumers in turn would have access to all relevant market information—a hypercompetitive market. Market middlemen would disappear, resulting in lowered costs to consumers. This intensely competitive, disintermediated environment with lowered transaction costs would eliminate product brands as well as the possibility of monopoly profits based on brands, geography, or special access factors. Unfair competitive advantages and the ability to reap returns on capital that far extended a fair market rate of return would be eliminated. Their vision was called friction-free commerce.
The entrepreneurs, venture capitalists, and marketers in turn saw e-commerce as an opportunity to earn great returns on invested capital. They saw the e-commerce marketspace and technologies as a powerful method of increasing their ability to even more precisely segment the market into groups with different price sensitivities. They believed that huge profits could be garnered by firms that quickly achieved high market visibility and that these successful first movers would become the new intermediaries of e-commerce, displacing the traditional retail merchants and content suppliers.
The computer scientists' vision of an ungoverned Internet has not come to fruition as governments have increasingly sought to regulate and control the technology to ensure that positive social benefits result. The economists' vision has also for the most part not materialized for a variety of reasons. Consumers have proven to be less price sensitive than expected and the importance of brand names to consumers' perceptions of quality and service has been extended rather than decreased or eliminated. Entrepreneurs have discovered new methods for differentiating products and services. New information asymmetries are continually being introduced by marketers. Disintermediation has also not occurred as new middlemen emerged. The visions of the entrepreneurs, venture capitalists, and marketers have also largely not come to fruition as the first movers from the early years of e-commerce only rarely succeeded. The fast follower large traditional firms with the resources needed to develop mature markets are displacing most of the venture capitalist backed entrepreneurs.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
79) Above all, e-commerce is a ________ phenomenon.
A) technology driven
B) finance-driven
C) sociological
D) government-driven
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
80) Which business application is associated with the technological development of local area networks and client/server computing?
A) transaction automation (e.g., payroll)
B) desktop automation (e.g., word processing)
C) industrial system automation (e.g., supply chain management)
D) workgroup automation (e.g., document sharing)
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
81) Which of the following is an important societal issue related to e-commerce?
A) consumer behavior
B) value webs
C) cloud computing
D) intellectual property
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
82) What kind of problems does the global nature of e-commerce pose?
Answer: The global nature of e-commerce poses public policy issues of equity, equal access, content regulation, and taxation. For instance, in the United States, public telephone utilities are required under public utility and public accommodation laws to make basic service available at affordable rates, so everyone can have telephone service. Should these laws be extended to the Internet and the Web? If goods are purchased by a New York State resident from a website in California, shipped from a center in Illinois, and delivered to New York, what state has the right to collect a sales tax? Should some heavy Internet users who consume extraordinary amounts of bandwidth by streaming endless movies be charged extra for service, or should the Internet be neutral with respect to usage? What rights do nation-states and their citizens have with respect to the Internet, the Web, and e-commerce?
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
83) What are the major stages in the development of corporate computing, and how does the Internet and Web fit into this development trajectory?
Answer: The major stages of computer technology are the following Mainframe Computers (1950-1975); Minicomputers (1970-1980); Personal Computers (1980-present): Local Area Networks and Client/Server Computing (1980-present); Enterprise-wide Computing (1990-present); and the Internet and Web/Mobile Platform/Cloud Computing era (1995-present). The Internet, while representing a sharp break from prior corporate computing and communications technologies, is nevertheless just the latest development in the evolution of corporate computing and part of the continuing chain of computer-based innovations in business.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
84) Which of the following statements is not true?
A) No single academic perspective dominates research about e-commerce.
B) Economists take a purely technical approach to e-commerce.
C) There are two primary approaches to e-commerce: behavioral and technical.
D) Management scientists are interested in e-commerce as an opportunity to study how business firms can exploit the Internet to achieve more efficient business operations.
Answer: B
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.7: Identify the major academic disciplines contributing to e-commerce.
85) Which academic disciplines have a technical approach to e-commerce? What is each discipline interested in?
Answer: Computer scientists, operations management scientists, and certain technical groups within the information systems discipline all take a technical approach to e-commerce. Computer scientists are interested in e-commerce as an exemplary application of Internet technology. They are concerned with the development of computer hardware, software, and telecommunications systems, as well as standards, encryption, and database design and operation. Operations management scientists are primarily interested in building mathematical models of business processes and optimizing these processes. They are interested in e-commerce as an opportunity to study how business firms can exploit the Internet to achieve more efficient business operations. Technical groups within the information systems specialty focus on data mining, search engine design, and artificial intelligence.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.7: Identify the major academic disciplines contributing to e-commerce.
Chapter 1 The Revolution Is Just Beginning
1) E-commerce can be defined as:
A) digitally enabled commercial transactions between and among organizations and individuals.
B) the use of digital technologies in a firm's daily activities.
C) the digital enablement of transactions and processes within an organization.
D) any electronically based organizational activity that supports a firm’s market exchanges.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
2) Which of the following is an example of e-business?
A) Amazon's inventory control system
B) the Amazon.com website
C) an Amazon mobile app
D) Amazon's Pinterest page
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
3) Which of the following can be considered synonymous with the term e-commerce?
A) e-business
B) digital commerce
C) the Internet
D) the Web
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
4) The term e-commerce refers to the digital enabling of business processes both inside and outside the firm.
Answer: FALSE
Difficulty: Moderate
AACSB: Information Technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
5) E-commerce and e-business systems blur together at the business firm boundary, where internal business systems link up with suppliers or customers.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
6) What is the key factor in determining if a transaction is "commerce"?
Answer: The key factor in determining if a transaction is commerce is the "exchange of value” (e.g., money) across organizational or individual boundaries in return for products and services.
Difficulty: Easy
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
7) Which of the following is not a unique feature of e-commerce technology?
A) interactivity
B) social technology
C) information asymmetry
D) richness
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
8) Which of the following features of e-commerce technology enables merchants to market and sell "complex" goods and services to consumers via marketing messages that can integrate video, audio, and text?
A) richness
B) ubiquity
C) information density
D) personalization
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
9) Which of the following features of e-commerce technology allows users to participate in the creation of online content?
A) ubiquity
B) global reach
C) information density
D) social technology
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
10) Which of the following is the best definition of transaction cost?
A) the expense of changing national or regional prices
B) the cost of participating in a market
C) the cost of finding suitable products in the market
D) the cost merchants pay to bring their goods to market
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
11) The world's online population was estimated to be around ________ in 2018.
A) 360 million
B) 3.6 billion
C) 36 billion
D) 360 billion
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
12) Which of the following features of e-commerce technology is related to the concept of network externalities?
A) richness
B) interactivity
C) universal standards
D) information density
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
13) Which of the following statements is true about the traditional tradeoff between the richness and reach of a marketing message prior to the development of the Web?
A) Marketing messages had little richness.
B) The smaller the audience reached, the less rich the message.
C) The larger the audience reached, the less rich the message.
D) Richness was unrelated to reach.
Answer: C
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
14) Interactivity in the context of e-commerce provides which of the following functionalities?
A) the ability to physically touch and manipulate a product
B) complexity and content of a message
C) the ability of consumers to create and distribute content
D) the enabling of two-way communication between consumer and merchant
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
15) The costs incurred by merchants in having to change product prices (such as the costs of reentering prices into computer systems) are referred to as which of the following?
A) subscription costs
B) fixed costs
C) menu costs
D) variable costs
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
16) Which of the following refers to any disparity in relevant market information among parties in a transaction?
A) information asymmetry
B) unfair competitive advantage
C) imperfect competition
D) dynamic pricing
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
17) Which of the following is a physical place you visit in order to transact?
A) marketspace
B) marketplace
C) social network
D) the Internet
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
18) The total number of users or customers an e-commerce business can obtain is a measure of which of the following?
A) ubiquity
B) interactivity
C) reach
D) information density
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
19) Which of the following refers to the complexity and content of a message?
A) richness
B) reach
C) information density
D) interactivity
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
20) E-commerce is available just about everywhere and anytime. This is known as:
A) richness.
B) information density.
C) ubiquity.
D) reach.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
21) Ubiquity increases the cognitive energy required to transact in a marketspace.
Answer: FALSE
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
22) The fact that e-commerce is conducted based on universal standards decreases search costs for consumers.
Answer: TRUE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
23) Universal standards make price discovery more costly, slower, and less accurate.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
24) Price transparency refers to the ease with which consumers can find out what merchants pay for products.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
25) Personalization involves targeting marketing messages to specific individuals by adjusting the message based upon a consumer's preferences or past purchasing behavior.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
26) E-commerce technologies provide a unique, many-to-many model of mass communication.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
27) Why study e-commerce?
Answer: E-commerce is a disruptive innovation that is different and more powerful than any of the other technologies we have seen in the past century. E-commerce technologies—and the digital markets that result—have brought about some fundamental, unprecedented shifts in commerce. While other technologies transformed economic life in the twentieth century, the evolving Internet and other information technologies are shaping the twenty-first century.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.1: Understand why it is important to study e-commerce.
28) Identify the eight unique features of e-commerce technology and explain how these features set e-commerce apart from more traditional ways of conducting commercial transactions.
Answer: The eight unique features of e-commerce technology are ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, and social technology.
The fact that e-commerce is available nearly everywhere, at any time, (ubiquity) extends the marketplace beyond traditional boundaries and removes it from a temporal and geographic location. A marketspace is created in which shopping can take place anywhere, enhancing consumer convenience and reducing shopping costs, whereas in traditional commerce the marketplace is a physical place you must visit in order to transact.
The global reach of e-commerce means that commerce is enabled across national and cultural boundaries as never before, with potentially billions of consumers and millions of businesses worldwide included in the marketspace. Traditional commerce, by contrast, is local or regional involving local merchants or national merchants with local outlets.
Universal standards (one set of technical media standards) also allow for the seamless enablement of global commerce. In contrast, most traditional commerce technologies differ from one nation to the next. In traditional markets, national sales forces and small retail stores can provide a complex and content-rich message. However, there is generally a trade-off between the richness of the message and the number of consumers who can be reached with the marketing message. In e-commerce the trade-off is no longer necessary.
An information rich environment is extended globally. Unlike any other commercial technology of the twentieth century, except perhaps the telephone, e-commerce technologies are interactive, allowing for two-way communication between the seller and the consumer. E-commerce technologies reduce information collection, storage, processing, and communication costs, thereby greatly increasing the prevalence, accuracy, and timeliness of information. This information density (information that is more plentiful, cheaper, and of higher quality) sets e-commerce apart from all other traditional methods of conducting transactions.
E-commerce technologies also permit the personalization and customization of marketing messages on a level that was impossible with previous commerce technologies. Marketing messages can be targeted to specific individuals based on their interests and past purchasing behavior, and the product or service can be altered to suit a customer's preferences and prior behavior. Social technology allows users to easily generate and share content and permits a many-to-many model of mass communications that is different from previous technologies. This supports the creation of new business models and products that support social network services.
Difficulty: Difficult
AACSB: Analytical thinking; Information technology; Written and oral communication
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
29) How has e-commerce changed the marketing of goods?
Answer: E-commerce has greatly changed the marketing of goods. Before e-commerce was developed, the marketing and sale of goods was a mass-marketing and sales force-driven process. Marketers viewed consumers as passive targets of advertising campaigns. E-commerce has brought many new possibilities for marketing. The Internet and Web can deliver, to an audience of millions, rich marketing messages with text, video, and audio in a way not possible with traditional commerce technologies such as radio, television, or magazines. Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. In addition, much information about the consumer can be gathered from the website the consumer visits. With the increase in information density, a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. The result is a level of personalization and customization unthinkable with existing commerce technologies.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.3: Identify and describe the unique feature of e-commerce technology and discuss their business significance.
30) Which type of e-commerce is distinguished by the type of technology used in the transaction rather than by the nature of the market relationship?
A) consumer-to-consumer (C2C)
B) social e-commerce
C) mobile e-commerce
D) business-to-business (B2B)
Answer: C
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
31) Which of the following is a leading platform for social e-commerce?
A) Amazon
B) eBay
C) Wikipedia
D) Facebook
Answer: D
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
32) Business-to-consumer (B2C) e-commerce in the United States:
A) grew at double-digit rates between 2010 and 2018.
B) has less revenue than C2C e-commerce.
C) now constitutes over 50% of the overall U.S. retail market.
D) is growing more slowly as it confronts its own fundamental limitations.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
33) Which of the following is not true about the use of apps?
A) Users spend nearly 90% of their smartphone app minutes using their top five apps.
B) Users still spend less time using apps than they do using desktops or mobile websites.
C) Apps are easier to control and monetize than websites.
D) Users typically use about 20 different apps per month.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
34) Which of the following is an example of an on-demand service company?
A) YouTube
B) Airbnb
C) Tumblr
D) Facebook
Answer: B
Difficulty: Easy
AACSB: Analytical thinking
Learning Objective: 1.4: Describe the major types of e-commerce.
35) Which of the following is a platform for B2B e-commerce?
A) Airbnb
B) Facebook
C) Groupon
D) Go2Paper
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
36) All of the following are platforms for C2C e-commerce except:
A) Walmart
B) Facebook Marketplace
C) Craigslist
D) Etsy
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
37) All of the following are examples of social networks except:
A) Instagram.
B) Twitter.
C) Y Combinator.
D) Pinterest.
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
38) B2B e-commerce is the largest type of e-commerce.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
Learning Objective: 1.4: Describe the major types of e-commerce.
39) List and briefly explain the main types of e-commerce.
Answer: The main types of e-commerce are business-to-consumer (B2C), in which online businesses attempt to reach individual consumers; business-to-business (B2B), in which businesses focus on selling to other businesses; consumer-to-consumer (C2C), which provides a market in which consumers can sell goods to each other; mobile e-commerce (m-commerce), which refers to the use of wireless digital devices to enable online transactions; social e-commerce, which is commerce enabled by social networks and online social relationships; and local e-commerce, which is e-commerce that is focused on engaging the customer based on his or her geographical location.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.4: Describe the major types of e-commerce.
40) All of the following statements about e-commerce in the United States in 2018 are true except:
A) social e-commerce generated more revenue than mobile e-commerce.
B) mobile advertising accounted for over 70% of all digital advertising spending.
C) on-demand service firms fueled the growth of local e-commerce.
D) growth rates for retail e-commerce were higher in the Middle East than in the United States.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
41) In 2018, about ________ of Americans accessed the Internet solely via a mobile device.
A) 8%
B) 16%
C) 28%
D) 34%
Answer: B
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
42) Which of the following is not a major business trend in e-commerce in 2018-2019?
A) Mobile e-commerce continues to grow.
B) Retail e-commerce revenues exceed B2B e-commerce revenues for the first time.
C) On-demand service companies garner multibillion-dollar valuations.
D) Social e-commerce continues to grow.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
43) Which of the following is not a major technology trend in e-commerce in 2018-2019?
A) Mobile messaging services are now used by almost two-thirds of smartphone users.
B) Firms are turning to business analytics to make sense out of big data.
C) Smart speakers provide an additional platform for e-commerce.
D) Growth of the Internet of Things slows down.
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
44) All of the following are major social trends in e-commerce in 2018-2019 except for:
A) concerns about the flood of temporary, poorly paid jobs without benefits being generated by on-demand service companies.
B) concerns over commercial and governmental privacy invasion.
C) concerns about the U.S. Supreme Court ruling that online businesses do not need to collect state sales tax.
D) concerns about the increasing market dominance of Facebook, Amazon, and Google.
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
45) Which of the following statements about the mobile platform is not true?
A) Over 91% of Americans used a mobile device to access the Internet at least some of the time in 2018.
B) Over 220 Americans used tablet computer apps in 2018.
C) M-commerce purchases were expected to reach almost $280 billion in 2018.
D) The time U.S. adults spend using mobile apps accounts for over 60% of total digital minutes spent.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
46) Which of the following describes the basic web policy of large firms during the Invention period?
A) Integrate social networks and the mobile platform with website marketing.
B) Emphasize the necessity for the Web to generate profits.
C) Use the Web to sell complex goods and services online.
D) Maintain a basic, static website depicting the firm's brand.
Answer: D
Difficulty: Moderate
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
47) It is estimated that by 2022, the size of the B2B market will reach:
A) $730 million.
B) $7.3 billion.
C) $730 billion.
D) $7.3 trillion.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.4: Describe the major types of e-commerce.
48) Which of the following statements about the Web is not true?
A) The Web is the technology upon which the Internet is based.
B) The Web was the original "killer app."
C) The Web provides access to pages written in Hypertext Markup Language.
D) The Web is both a communications infrastructure and an information storage system.
Answer: A
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
49) In 2018, there were more than ________ Internet hosts.
A) 1 million
B) 10 million
C) 100 million
D) 1 billion
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
50) All of the following can be considered a precursor to e-commerce except:
A) the development of the smartphone.
B) Baxter Healthcare's PC-based remote order entry system.
C) the French Minitel.
D) the development of Electronic Data Interchange standards.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
51) ________ was the first truly large-scale digitally enabled transaction system in the B2C arena.
A) Telex
B) The Baxter Healthcare system
C) The French Minitel
D) Eelectronic Data Interchange (EDI)
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
52) In which year can e-commerce be said to have begun?
A) 1983
B) 1985
C) 1995
D) 2001
Answer: C
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
53) All of the following are issues facing Pinterest except:
A) copyright infringement.
B) inability to retain users.
C) spam.
D) scams.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
54) Which of the following is a characteristic of e-commerce during the Invention period?
A) mobile technology
B) earnings and profit emphasis
C) disintermediation
D) extensive government surveillance
Answer: C
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
55) All of the following are examples of Web 2.0 sites and applications except:
A) photo-sharing sites.
B) blogs.
C) wikis.
D) auction sites.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
56) Which of the following is not a characteristic of a perfect competitive market?
A) Price, cost, and quality information are equally distributed.
B) A nearly infinite set of suppliers compete against one another.
C) Customers have access to all relevant information worldwide.
D) It is highly regulated.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
57) All of the following were visions of e-commerce expressed during the early years of e-commerce except:
A) a nearly perfect information marketspace.
B) friction-free commerce.
C) disintermediation.
D) fast follower advantage.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
58) Unfair competitive advantages occur when:
A) one competitor has an advantage that others cannot purchase.
B) market middlemen are displaced.
C) information is equally distributed and transaction costs are low.
D) firms are able to gather monopoly profits.
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
59) The early years of e-commerce were driven by all of the following factors except:
A) an emphasis on exploiting traditional distribution channels.
B) a huge infusion of venture capital funds.
C) an emphasis on quickly achieving very high market visibility.
D) visions of profiting from new technology.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
60) The early years of e-commerce are considered:
A) the most promising time in history for the successful implementation of first mover advantages.
B) an economist's dream come true, where for a brief time, consumers had access to all relevant market information and transaction costs plummeted.
C) a stunning technological success as the Internet and the Web increased from a few thousand to billions of e-commerce transactions per year.
D) a dramatic business success as 85% of dot-coms formed since 1995 became flourishing businesses.
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
61) Which of the following best describes the early years of e-commerce?
A) They were a technological success but a mixed business success.
B) They were a technological success but a business failure.
C) They were a technological failure but a business success.
D) They were a mixed technological and business success.
Answer: A
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
62) Which of the following is a characteristic of the Reinvention phase of e-commerce?
A) massive proliferation of dot-com start-ups
B) widespread adoption of broadband networks
C) rapid growth of search engine advertising
D) expansion of e-commerce to include services as well as goods
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
63) Which of the following is a characteristic of the Consolidation phase of e-commerce?
A) predominance of pure online strategies
B) emphasis on revenue growth versus profits
C) brand extension and strengthening becomes more important than creating new brands
D) shift to a technology-driven approach
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
64) Which of the following is not true regarding e-commerce today?
A) Economists' visions of a friction-free market have not been realized.
B) Consumers are less price-sensitive than expected.
C) There remains considerable persistent price dispersion.
D) The market middlemen disappeared.
Answer: D
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
65) Which of the following statements is not true?
A) Information asymmetries are continually being introduced by merchants and marketers.
B) Intermediaries have not disappeared.
C) Overall transaction costs have dropped dramatically.
D) Brands remain very important in e-commerce.
Answer: C
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
66) Which of the following is an example of an e-commerce first mover that failed?
A) Etsy
B) eToys
C) eBay
D) E*Trade
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
67) Which of the following refers to the practice of researching a product online before purchasing it at a physical store?
A) zooming
B) grazing
C) showrooming
D) webrooming
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
68) Which of the following was the original "killer app" that made the Internet commercially interesting and extraordinarily popular?
A) e-commerce
B) The Web
C) social networks
D) mobile apps
Answer: B
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
69) Which of the following refers to the displacement of market middlemen and the creation of a new direct relationship between producers and consumers?
A) network effect
B) disintermediation
C) friction-free commerce
D) first mover advantage
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
70) Which of the following is not an element of friction-free commerce?
A) Information is equally distributed.
B) Transaction costs are high.
C) Prices can be dynamically adjusted to reflect actual demand.
D) Unfair competitive advantages are eliminated.
Answer: B
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
71) Retail e-commerce in the United States is not expected to continue growing at double-digit growth rates in 2018-2019.
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
72) The Internet is a worldwide system of computer networks.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
73) The Internet has shown similar growth patterns as other electronic technologies of the past.
Answer: FALSE
Difficulty: Easy
AACSB: Application of knowledge
Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
74) The emergence of mobile, social, and local e-commerce occurred during the Consolidation period of e-commerce.
Answer: FALSE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
75) The Reinvention period of e-commerce is as much a sociological phenomenon as it is a technological or business phenomenon.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
76) Price dispersion has been eliminated in e-commerce
Answer: FALSE
Difficulty: Difficult
AACSB: Application of knowledge
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
77) What is a first mover? Why was being a first mover considered to be important during the early years of e-commerce?
Answer: First movers are firms who are first to market in a particular area, and who move quickly to gather market share. First movers hope to establish a large customer base quickly, build brand name recognition early, and inhibit competitors by building in switching costs for their customers through proprietary interface designs and features. The thinking was that once customers became accustomed to using a company's unique web interface and feature set, they could not easily be switched to competitors. In the best case, the entrepreneurial firm would invent proprietary technologies and techniques that almost everyone adopted, creating a network effect, which occurs where all participants receive value from the fact that everyone else uses the same tool or product.
Difficulty: Moderate
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
78) Describe the visions and forces during the early days of e-commerce in terms of what the various interest groups hoped for: the computer science and information technology people; the economists; and the entrepreneurs, venture capitalists and marketers. Explain whether what each group envisioned came to fruition and why or why not.
Answer: The computer scientists and information technologists' vision included universal communications and a computing environment that everyone could access with inexpensive computers. Their interest was in creating a vast worldwide information collection from libraries, universities, governments, and scientific institutions that was ungoverned by any nation and free to all. They believed that the Internet, and by extension, the e-commerce that operated within the infrastructure, should be self-governed and self-regulated.
The economists envisioned a near-perfect competitive market where price, cost, and quality information are equally distributed. The marketspace would include a nearly infinite number of suppliers with equal access to hundreds of millions of customers, but where those consumers in turn would have access to all relevant market information—a hypercompetitive market. Market middlemen would disappear, resulting in lowered costs to consumers. This intensely competitive, disintermediated environment with lowered transaction costs would eliminate product brands as well as the possibility of monopoly profits based on brands, geography, or special access factors. Unfair competitive advantages and the ability to reap returns on capital that far extended a fair market rate of return would be eliminated. Their vision was called friction-free commerce.
The entrepreneurs, venture capitalists, and marketers in turn saw e-commerce as an opportunity to earn great returns on invested capital. They saw the e-commerce marketspace and technologies as a powerful method of increasing their ability to even more precisely segment the market into groups with different price sensitivities. They believed that huge profits could be garnered by firms that quickly achieved high market visibility and that these successful first movers would become the new intermediaries of e-commerce, displacing the traditional retail merchants and content suppliers.
The computer scientists' vision of an ungoverned Internet has not come to fruition as governments have increasingly sought to regulate and control the technology to ensure that positive social benefits result. The economists' vision has also for the most part not materialized for a variety of reasons. Consumers have proven to be less price sensitive than expected and the importance of brand names to consumers' perceptions of quality and service has been extended rather than decreased or eliminated. Entrepreneurs have discovered new methods for differentiating products and services. New information asymmetries are continually being introduced by marketers. Disintermediation has also not occurred as new middlemen emerged. The visions of the entrepreneurs, venture capitalists, and marketers have also largely not come to fruition as the first movers from the early years of e-commerce only rarely succeeded. The fast follower large traditional firms with the resources needed to develop mature markets are displacing most of the venture capitalist backed entrepreneurs.
Difficulty: Difficult
AACSB: Analytical thinking; Written and oral communication
Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.
79) Above all, e-commerce is a ________ phenomenon.
A) technology driven
B) finance-driven
C) sociological
D) government-driven
Answer: A
Difficulty: Moderate
AACSB: Information technology
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
80) Which business application is associated with the technological development of local area networks and client/server computing?
A) transaction automation (e.g., payroll)
B) desktop automation (e.g., word processing)
C) industrial system automation (e.g., supply chain management)
D) workgroup automation (e.g., document sharing)
Answer: D
Difficulty: Difficult
AACSB: Information technology
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
81) Which of the following is an important societal issue related to e-commerce?
A) consumer behavior
B) value webs
C) cloud computing
D) intellectual property
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
82) What kind of problems does the global nature of e-commerce pose?
Answer: The global nature of e-commerce poses public policy issues of equity, equal access, content regulation, and taxation. For instance, in the United States, public telephone utilities are required under public utility and public accommodation laws to make basic service available at affordable rates, so everyone can have telephone service. Should these laws be extended to the Internet and the Web? If goods are purchased by a New York State resident from a website in California, shipped from a center in Illinois, and delivered to New York, what state has the right to collect a sales tax? Should some heavy Internet users who consume extraordinary amounts of bandwidth by streaming endless movies be charged extra for service, or should the Internet be neutral with respect to usage? What rights do nation-states and their citizens have with respect to the Internet, the Web, and e-commerce?
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
83) What are the major stages in the development of corporate computing, and how does the Internet and Web fit into this development trajectory?
Answer: The major stages of computer technology are the following Mainframe Computers (1950-1975); Minicomputers (1970-1980); Personal Computers (1980-present): Local Area Networks and Client/Server Computing (1980-present); Enterprise-wide Computing (1990-present); and the Internet and Web/Mobile Platform/Cloud Computing era (1995-present). The Internet, while representing a sharp break from prior corporate computing and communications technologies, is nevertheless just the latest development in the evolution of corporate computing and part of the continuing chain of computer-based innovations in business.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.
84) Which of the following statements is not true?
A) No single academic perspective dominates research about e-commerce.
B) Economists take a purely technical approach to e-commerce.
C) There are two primary approaches to e-commerce: behavioral and technical.
D) Management scientists are interested in e-commerce as an opportunity to study how business firms can exploit the Internet to achieve more efficient business operations.
Answer: B
Difficulty: Difficult
AACSB: Analytical thinking
Learning Objective: 1.7: Identify the major academic disciplines contributing to e-commerce.
85) Which academic disciplines have a technical approach to e-commerce? What is each discipline interested in?
Answer: Computer scientists, operations management scientists, and certain technical groups within the information systems discipline all take a technical approach to e-commerce. Computer scientists are interested in e-commerce as an exemplary application of Internet technology. They are concerned with the development of computer hardware, software, and telecommunications systems, as well as standards, encryption, and database design and operation. Operations management scientists are primarily interested in building mathematical models of business processes and optimizing these processes. They are interested in e-commerce as an opportunity to study how business firms can exploit the Internet to achieve more efficient business operations. Technical groups within the information systems specialty focus on data mining, search engine design, and artificial intelligence.
Difficulty: Moderate
AACSB: Application of knowledge; Written and oral communication
Learning Objective: 1.7: Identify the major academic disciplines contributing to e-commerce.
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