Chapter 01: Introduction to Electronic Commerce
1. IBM defines electronic business as “the transformation of key business processes through the use of Internet
technologies.”
a.
True
b.
False
True
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2. A transaction is an exchange of value, such as a purchase, a sale, or the conversion of raw materials into a finished
product.
a.
True
b.
False
3. All the activities associated with a transaction result in measurable and recordable transactions.
a.
True
b.
False
4. Transferring funds, placing orders, sending invoices, and shipping goods to customers are all types of activities or
transactions.
a.
True
b.
False
5. Business-to-business electronic commerce occurs when a person sells an item through a Web auction site to another
Chapter 01: Introduction to Electronic Commerce
person.
a.
True
b.
False
False
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6. The U.S. government is one of the largest electronic data interchange (EDI) trading partners in the world.
a.
True
b.
False
True
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7. A problem that EDI pioneers faced was the high cost of implementation.
a.
True
b.
False
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Easy
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8. Value-added networks are leased telephone lines that establish direct network connections to all trading partners of an
organization.
a.
True
b.
False
False
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9. The increase in broadband connections in homes is a key element in the B2C component of the second wave.
a.
True
b.
False
True
10. In some cases, business processes use traditional commerce activities very effectively, and technology cannot improve
them.
a.
True
b.
False
True
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11. Irrespective of the transferability of merchandising skills to the Web, products are difficult to sell on the Web.
a.
True
b.
False
False
1
Moderate
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12. A commodity item is a product or service that is hard to distinguish from the same product or service provided by
other sellers.
a.
True
b.
False
13. A product’s shipping profile is a collection of details about the shipper.
a.
True
b.
False
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Easy
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14. A DVD is an excellent example of an item with a high value-to-weight ratio.
a.
True
b.
False
True
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Easy
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15. A product that has a strong brand reputation is easier to sell over the Web than an unbranded item.
a.
True
b.
False
True
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16. Electronic commerce provides buyers with an easy way to customize the level of detail in the information they obtain
about a prospective purchase.
a.
True
b.
False
True
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17. Electronic commerce reduces the speed and accuracy with which businesses can exchange information.
a.
True
b.
False
False
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Easy
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18. Electronic payment can be easier to audit and monitor than payment made by check.
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Chapter 01: Introduction to Electronic Commerce
a.
True
b.
False
True
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19. The legal environment in which electronic commerce is conducted is full of clear and concise laws.
a.
True
b.
False
False
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Easy
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20. Economists use a formal definition of market that includes two conditions: first, the potential sellers of a good come
into contact with potential buyers, and second, that a medium of exchange is available.
a.
True
b.
False
21. Most economists agree that markets are weak and ineffective mechanisms for allocating scarce resources.
a.
True
b.
False
False
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22. Businesses and individuals can use electronic commerce to reduce transaction costs by improving the flow of
information and increasing the coordination of actions.
a.
True
b.
False
True
23. Buyers and sellers in commodity markets experience significant transaction costs.
a.
True
b.
False
24. Using the value chain reinforces the idea that electronic commerce should be a business solution, not a technology
implemented for its own sake.
a.
True
b.
False
True
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25. A freight forwarder is a company that arranges shipping and insurance for international transactions.
a.
True
b.
False
26. Consumer shopping on the Web is often called _____.
a.
B2B
b.
B2C
c.
brick and mortar retailing
d.
e-procurement
b
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27. The group of logical, related, and sequential activities and transactions in which businesses engage are often
collectively referred to as _____.
a.
business services
b.
business processes
c.
business logistics
d.
business communications
28. Banks use _____, which are electronic transmissions of account exchange information over private communications’
networks.
a.
wire transfers
b.
machine translations
c.
data analytics
d.
big data
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29. Electronic funds transfers are also called _____.
a.
wire transfers
b.
business transfers
c.
data transfers
d.
strategic transfers
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30. Businesses that engage in electronic data interchange with each other are called _____.
a.
institutional partners
b.
channel partners
c.
commodity partners
d.
trading partners
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31. A(n) _____ is an independent firm that offers connection and transaction-forwarding services to buyers and sellers
engaged in electronic data interchange.
a.
value-added network
b.
freight forwarder
c.
business incubator
d.
online retailer
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32. _____ is the use of interpersonal connections online to promote or sell goods and services.
a.
Social integration
b.
Social commerce
c.
M-commerce
d.
Vertical integration
b
Easy
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33. _____ refers to technologies that include software that allows users of Web sites to participate in the creation, edition,
and distribution of content on a Web site owned and operated by a third party.
a.
Big data
b.
Web 1.0
c.
Pure dot-com
d.
Web 2.0
d
Easy
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34. The combination of store design, layout, and product display knowledge to create store environments that help
convince customers to buy is called _____.
a.
merchandising
b.
crowdsourcing
c.
outsourcing
d.
departmentalizing
35. A(n) _____ is a set of processes that combine to achieve a company’s primary goal, which is typically to yield a profit.
a.
value system
b.
industry value chain
Chapter 01: Introduction to Electronic Commerce
c.
strategic business unit
d.
business model
d
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36. A(n) _____ is a specific collection of business processes used to identify customers, market to those customers, and
generate sales to those customers.
a.
industry value chain
b.
strategic alliance
c.
revenue model
d.
value-added network
37. _____ can be a better way to sell items that rely on personal selling skills.
a.
M-commerce
b.
Social commerce
c.
Traditional commerce
d.
E-commerce
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38. A barrier to the predictability of costs and revenues of electronic commerce projects is _____.
a.
the rapid changes in underlying technologies
b.
the need for a critical mass willing to buy through the
Internet
c.
the cultural obstacles in conducting electronic
commerce
d.
the legal environment in which electronic commerce is
conducted
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Easy
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39. _____ are the total of all costs that a buyer and a seller incur as they gather information and negotiate a purchase-and-
sale transaction.
a.
Opportunity costs
b.
Operating costs
c.
Transaction costs
d.
Historical costs
Chapter 01: Introduction to Electronic Commerce
40. One significant component of _____ can be the investment a seller makes in equipment or in the hiring of skilled
employees to supply the product or service to the buyer.
a.
economic costs
b.
transaction costs
c.
opportunity costs
d.
retention costs
41. The practice of an existing firm replacing one or more of its supplier markets with its own hierarchical structure for
creating the supplied product is called _____.
a.
merchandising
b.
crowdsourcing
c.
vertical integration
d.
horizontal integration
42. An infrastructure issue that a company faces when it conducts international commerce includes _____.
a.
communication costs
b.
language differences
c.
trusting relationships
d.
inhospitable cultures
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43. In a(n)_____, companies coordinate their strategies, resources, and skill sets by forming long-term, stable
relationships with other companies and individuals based on shared purposes.
a.
market economic structure
b.
informal economic structure
c.
hierarchical economic structure
d.
network economic structure
1
44. Strategic partnerships occurring between or among companies operating on the Internet are called _____.
a.
network alliances
b.
virtual integration
c.
virtual companies
d.
value-added partnerships
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45. _____ is a primary activity undertaken by an organization’s strategic business unit.
a.
Identifying customers
b.
Training employees
c.
Research and development
d.
Borrowing funds
46. As more people participate in a network, the value of the network to each participant increases. This increase in value
is called a _____.
a.
telework model
b.
network effect
c.
network model
d.
transactional effect
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47. A _____ is a way of organizing the activities that each strategic business unit undertakes to design, produce, promote,
market, deliver, and support the products or services it sells.
a.
business activity
b.
SWOT analysis
c.
value chain
d.
strategic alliance
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48. According to Porter, _____ describes the larger stream of activities into which a particular business unit’s value chain
is embedded.
a.
business strategy
b.
value system
c.
business integration
d.
value-added network
49. SWOT is the acronym for _____.
a.
supply, wealth, occupations, and threats
b.
supply, weaknesses, opportunities, and testing
c.
strengths, weaknesses, opportunities, and threats
d.
strengths, wealth, occupations, and testing
50. In SWOT analysis, the question “Are industry trends moving upward?” involves identifying the _____ of an
organization.
a.
strengths
b.
weaknesses
c.
opportunities
d.
threats
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51. The _____ refers to a strategy adopted by many companies and investors who believed that by being the first Web site
to offer a particular type of product or service, they would be given opportunities to be successful.
first-mover advantage
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52. Business-to-business (B2B) electronic commerce is sometimes called _____.
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53. In _____ or telework, an employee logs in to the company network through the Internet instead of traveling to an
office.
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54. _____ occurs when one business transmits computer-readable data in a standard format to another business.
Electronic data interchange (EDI)
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55. The highly sophisticated tools for investigating patterns and knowledge contained in big data are called _____.
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56. The term _____ is used in business to describe very large stores of information such as that collected by online sellers
about their customers.
big data
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57. The term _____ refers to the theft of intellectual property from the Web.
Chapter 01: Introduction to Electronic Commerce
58. A product’s _____ is the collection of attributes that affect how easily that product can be packaged and delivered.
59. A(n) _____ is a gathering of people who share a common interest, and this gathering takes place on the Internet.
60. Economists generally refer to large _____ as firms, or companies.
61. Multiple firms that sell similar products to similar customers make up a(n) _____.
62. _____ are mobile phones that include a Web browser, a full keyboard, and an identifiable operating system that allows
users to run various software packages.
63. A(n) _____ unit is an autonomous part of a company that is large enough to manage itself but small enough to respond
quickly to changes in its business environment.
64. The law of _____ says that most activities yield less value as the amount of consumption increases.
65. Departments devoted to negotiating purchase transactions with suppliers are called _____.
66. Human resource management and purchasing activities, which are part of a value chain model, are known as _____.
67. The _____ refer to the activities that each strategic business unit undertakes to design, produce, promote, market,
deliver, and support the products or services it sells.
68. A(n) _____ is a secure location where incoming international shipments can be held until customs requirements are
satisfied or until payment arrangements are completed.
69. Software translation is also referred to as _____ translation.
70. The term _____ refers to a translation that considers multiple elements of an environment, such as business and
cultural practices, in addition to dialect variations in the language.
71. The only difference a buyer perceives when shopping for a commodity item is its _____.
72. The combination of language and customs is often called _____.
73. _____ is a category of electronic commerce that includes individuals who buy and sell items among themselves.
74. A(n) _____ is a company that arranges the payment of tariffs and compliance with customs laws for international
shipments.
75. A(n) _____ is a task performed by a worker in the course of doing his or her job.
76. List the three categories of electronic commerce that are most commonly used.
77. What types of business processes are well suited to electronic commerce?
78. What are transaction costs?
79. List the primary and supporting activities organized by a value chain for a strategic business unit.
80. What are the SWOT analysis questions that an analyst should be asking to identify an organization’s strengths and
weaknesses?