36. Garland uses the family room of his home for his business. The children share his computer for their
homework and games. The family room also contains the TV and homework space for the children.
The IRS is likely to disallow his deduction for this space because:
a.
a separate space must be clearly set aside for the sole use of the business.
b.
his business did not generate enough income to qualify as a real business.
c.
no deduction is allowed for space in the home used for a business.
d.
the IRS designates any home-based business as a hobby and hobby expenses are not
deductible.
37. E-commerce refers to
a.
B2B models of doing business.
b.
the facilitation of business by making initial contact by electronic means.
c.
the buying and selling of products or services over the Internet
d.
a form of business that involves online trades and auctions.
38. How does electronic commerce benefit small firms?
a.
Small firms are often more “tech savvy” allowing quicker adoption of innovations.
b.
Large firms may not push the consumer towards the Internet resulting in small firms being
able to gain customers.
c.
E-commerce allows small firms to expand beyond local markets without having to make a
large investment.
d.
The government has committed significant resources to encourage small firms to adopt an
e-commerce business model.
39. Hermione decided to create an Internet site to complement her bricks-and-mortar store:
a.
to allow her customers to preview her products before coming to her store.
b.
to attract customers from outside her local area.
c.
to keep up with the competition.
d.
to reduce her overall expenses.
40. For small businesses, the Internet tends to blur ____ boundaries.
a.
industry
b.
geographic
c.
skill-dependent
d.
technological
41. The basis of eCRM is a
a.
focus on customization.
b.
conscientious work force.
c.
flexible distribution system.
d.
consumer-centric data warehouse.
42. In the B2B model, the customers are
a.
businesses.
b.
other consumers.
c.
franchisees.
d.
auction participants.
43. John created Acme Online to allow paper suppliers to compete for manufacturers’ orders over the
Internet in live auctions. This model would best be described as
a.
B2B.
b.
B2C.
c.
C2B.
d.
C2C.
44. Jeff’s Website Design and Data Storage deals directly with corporate customers online and builds
websites and data storage to specifications after an order is placed. By reducing the firm’s storage and
carrying costs, this example illustrates that B2B firms can create
a.
greater efficiency in their operations.
b.
greater efficiency in their buying and selling
c.
synergies between buying and selling.
d.
market reach through e-commerce.
45. Amazon.com represents the classic ____ firm.
a.
B2B
b.
B2C
c.
C2C
d.
Auction site
46. Charmaine has never bought anything from an online seller. Many others feel the same way. A
frequent reason for their reluctance is:
a.
they have had a bad online purchase experience in the past.
b.
it is difficult to predict how much time it will take to ship the product.
c.
websites are difficult to navigate.
d.
they are reluctant to purchase a product without first seeing it.
47. ShoeBiz produces shoes that until recently have been available only at the most exclusive stores.
ShoeBiz decided to create its own website and sell directly to the consumer. This strategy is known
as:
a.
intermediation.
b.
disintermediation.
c.
disinterment.
d.
dismantling the distribution chain.
48. Jason has neither a website nor a storefront. Instead, he lists his products for sale on a site that
provides customers with the ability to list products for potential buyers. Jason is using a ______ site.
a.
C2C
b.
C2B
c.
B2C
d.
B2B
49. Sites such as eBay and Bidstart.com derive most of their revenues from:
a.
banner ads.
b.
listing fees and commissions on sales.
c.
corporate sponsors.
d.
investors.
50. A variation of the content model is sometimes called the ____ model.
a.
electronic
b.
emerging
c.
information
d.
transaction
51. Reliable Construction created a website to post photos of some of their completed projects and display
their address and phone number along with a list of the types of projects they can complete. Reliable
has used the ___________ model.
a.
transaction-based
b.
content-based
c.
information-based
d.
customer-relationship-based
52. The major difference between the information-based model and the content-based model is:
a.
the presence of ads in the content-based model
b.
the ability to contact the site developer in the information-based model.
c.
the presence of an order-processing feature in the information-based model.
d.
the ability for the visitor to post comments on the content-based model.
53. Melissa would like to reduce the number of phone calls she gets from customers who want to place
orders. Which model would best work for Melissa?
a.
The information-based model
b.
The content-based model
c.
The transaction-based model
d.
The customer relationship-based model
54. Steve started a Web-based business offering a mechanism for buying and selling antiques. He has set
up his company using the ____ model.
a.
transaction-based
b.
content-based
c.
information-based
d.
premium-based
55. Ethical questions are being raised about the combination of the _________ and _________models on
one website.
a.
information, content
b.
information, transaction
c.
content, transaction
d.
content, blogging
56. Which emerging model of e-commerce is used to generate significant amounts of advertising revenue?
a.
eCRM
b.
Disintermediation
c.
Blogging
d.
Auction Site
57. Which statement is true about starting a business online as a part-time entity?
a.
While launching a business online as a part-time startup typically has a lower cost, the
over all cost is greater as the company grows.
b.
Flexibility is the main reason why an entrepreneur will start a business in this format.
c.
Starting a Internet-based businesses on a part-time basis reduces the entrepreneur’s
personal risk if the company should fail.
d.
Two of the above statements are true.
ESSAY
1. After identifying the five major factors in deciding the location for a business, summarize the impact
each factor has if an entrepreneur was opening a restaurant.
2. List and describe business environment conditions that may impact the location decision.
3. Describe the critical resource considerations that should guide the location decision.
4. List and discuss the challenges that an entrepreneur faces in designing the new operation’s physical
facilities. Give examples to support the answer.
5. Distinguish between manufacturing equipment, retail equipment and office equipment using a candle
factory and a candle store as examples.
6. List and explain the attractions and challenges of operating a home-based business.
7. Discuss the motivations for starting a home-based business. Are these motivations financial or family
based?
8. Discuss the legal considerations for a home-based business. What professionals should an
entrepreneur talk to before starting the business?
9. List and describe the different e-commerce business models related to the customer type.
MATCHING
Match the term with its definition. Some terms may not be used.
a.
auction sites
i.
e-commerce
b.
brick-and-mortar facility
j.
eCRM
c.
business incubator
k.
general-purpose equipment
d.
B2B model
l.
home-based business
e.
B2C model
m.
information-based model
f.
C2C model
n.
special-purpose equipment
g.
content-based model
o.
transaction-based model
h.
disintermediation
p.
zoning ordinance
1. A B2B wholesaler’s bypassing of a “middleman” to sell its product or service directly to the final
consumer
2. Web-based businesses offering participants the ability to list products for consumer bidding
3. An electronically based system that emphasizes customer relationships
4. A facility that provides shared space, services, and management assistance to new businesses
5. A business model in which a website provides information about a business, its products, and other
related matters but doesn’t charge for its use
6. A business model based on selling to final consumers electronically
7. A business model in which a website provides a mechanism for buying or selling products or services
8. A business model in which a website charges a fee for access to information but does not offer the
ability to buy and sell products and services
9. Local laws regulating land use
10. A business model usually set up around Internet auction sites that allow individuals and companies to
list items available for sale to potential bidders
11. Machines designed to serve specialized functions in the production process
12. A business model based on selling to business customers electronically
13. Machines that serve many functions in the production process
14. The traditional physical facility from which businesses have historically operated
15. The buying and selling of products or services over the Internet
