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Electronic Commerce 2012, 7e (Turban)
Chapter 1 Overview of Electronic Commerce
1.1 True/False
1) Electronic commerce is the process of buying, selling, or exchanging products, services, or
information via computer.
Answer: TRUE
Diff: 1 Page Ref: 4
2) Buying an e-book from Amazon is an example of partial electronic commerce.
Answer: FALSE
Diff: 1 Page Ref: 4
3) A brick-and-mortar organization performs its primary business offline, selling physical
products by means of physical agents.
Answer: TRUE
Diff: 1 Page Ref: 4
4) An extranet is a network that uses private corporate networks to link together multiple
intranets.
Answer: FALSE
Diff: 2 Page Ref: 5
AACSB: Use of information technology
5) Selling and buying electronically can be either business-to-consumer or business-to-business.
Answer: TRUE
Diff: 1 Page Ref: 6
6) Purchasing a computer from dell.com is an example of B2B commerce.
Answer: FALSE
Diff: 2 Page Ref: 6
7) Net-a-Porter buying merchandise from its designers is an example of B2B commerce.
Answer: TRUE
Diff: 2 Page Ref: 6
8) Network infrastructures include cell phones and other electronic devices that are located in
various locations by telecommunications networks, including wireless ones.
Answer: TRUE
Diff: 2 Page Ref: 7
AACSB: Use of information technology
9) Today, over 90 percent of EC volume is B2C.
Answer: FALSE
Diff: 2 Page Ref: 8
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10) If a company purchases Godiva chocolates as gifts for its employees and has Godiva mail
them directly to the recipient, the company is engaged in B2B2C.
Answer: TRUE
Diff: 2 Page Ref: 8
AACSB: Reflective thinking
11) S-commerce refers to electronic commerce activities conducted on Facebook or influenced
by the site.
Answer: FALSE
Diff: 2 Page Ref: 11
12) Despite the failures of individual companies and initiatives, the total volume of EC has been
growing each year.
Answer: TRUE
Diff: 2 Page Ref: 11
AACSB: Use of information technology
13) The first generation of EC involves social networks, virtual worlds, and online transactions.
Answer: FALSE
Diff: 1 Page Ref: 13
14) E-commerce 2.0 is based primarily on blogs and corporate-sponsored collaboration.
Answer: FALSE
Diff: 1 Page Ref: 13
AACSB: Use of information technology
15) According to O’Reilly (2005), Web 2.0 Level 1 applications operate offline but gain features
from going online.
Answer: TRUE
Diff: 3 Page Ref: 14
16) Social networking is the execution of any Web 2.0 activity, such as blogging and/or having a
presence in a social network.
Answer: TRUE
Diff: 1 Page Ref: 15
AACSB: Use of information technology
17) By definition, enterprise social networks are public.
Answer: FALSE
Diff: 2 Page Ref: 16
18) Booking tickets on Facebook without leaving the social network is an example of enterprise
social commerce.
Answer: FALSE
Diff: 2 Page Ref: 16
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19) Major characteristics of the digital economy include obsolescence, digitization, and wars.
Answer: TRUE
Diff: 2 Page Ref: 19
20) Economic, legal, societal, and technological factors have created a highly competitive
business environment in which customers are becoming less powerful.
Answer: FALSE
Diff: 2 Page Ref: 22
AACSB: Reflective thinking
21) The financial crisis of 2008-2010 resulted in many companies going out of business or being
acquired by other companies.
Answer: TRUE
Diff: 1 Page Ref: 23
AACSB: Use of information technology
22) Political and government is an example of a societal business pressure.
Answer: FALSE
Diff: 3 Page Ref: 24
23) Rapid technological obsolescence is an example of a technological business pressure.
Answer: TRUE
Diff: 1 Page Ref: 24
24) Responses to environmental pressures may include activities that exploit opportunities
created by changing conditions.
Answer: TRUE
Diff: 2 Page Ref: 24
25) Efficient transactions, price comparisons for customers, and global reach are three major
capabilities that contribute to the growth of EC.
Answer: TRUE
Diff: 1 Page Ref: 25
26) Business model refers to the series of value-adding activities that an organization performs to
achieve its goals, such as making a profit, at various stages of the production process.
Answer: FALSE
Diff: 2 Page Ref: 26
27) A business model is a method of doing business by which a company can generate revenue to
sustain itself.
Answer: TRUE
Diff: 2 Page Ref: 26
AACSB: Use of information technology
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28) Referencing the licensing fees revenue model, a company receives commissions for referring
customers to others’ websites.
Answer: FALSE
Diff: 2 Page Ref: 27
29) A business model outlines how the organization, or the EC project, will generate revenue
through sales, transaction fees, advertising fees, affiliate fees, or other revenue sources.
Answer: FALSE
Diff: 2 Page Ref: 27
30) Value proposition refers to the benefits that a company can derive from using EC.
Answer: TRUE
Diff: 2 Page Ref: 28
31) According to Amit and Zott (2001), consolidation value involves bundling some goods and
services together to provide more value than from offering them separately.
Answer: FALSE
Diff: 3 Page Ref: 28-29
32) According to Amit and Zott (2001), novelty creates value through innovative ways for
structuring transactions, connecting partners, and fostering new markets.
Answer: TRUE
Diff: 2 Page Ref: 28-29
33) According to the affiliate marketing EC business model, people use e-mail and social
networks for spreading word-of-mouth advertising.
Answer: FALSE
Diff: 2 Page Ref: 29
AACSB: Use of information technology
34) Corporate governance is the branch of philosophy that deals with what is considered to be
right and wrong.
Answer: FALSE
Diff: 1 Page Ref: 32
AACSB: Use of information technology
35) External barriers to EC include security, lack of technical knowledge, and lack of time and
resources.
Answer: FALSE
Diff: 2 Page Ref: 32
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1.2 Multiple Choice
1) A key success factor for Net-A-Porter is the ability to
A) buy what customers want from designers.
B) provide services at a lower cost.
C) provide products to a niche market.
D) use IT for competitive advantage.
Answer: A
Diff: 3 Page Ref: 2
2) Net-A-Porter’s online store is an example of
A) business-to-employees EC.
B) business-to-consumer EC.
C) business-to-business EC.
D) consumer-to-consumer EC.
Answer: B
Diff: 1 Page Ref: 3
3) A broader definition of EC that includes not just the buying and selling of goods and services,