This Document Contains Chapters 1 to 2 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 Answer: True 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 Answer: True 3. All the activities associated with a transaction result in measurable and recordable transactions. a. True b. False Answer: False 4. Transferring funds, placing orders, sending invoices, and shipping goods to customers are all types of activities or transactions. a. True b. False Answer: True 5. Business-to-business electronic commerce occurs when a person sells an item through a Web auction site to another person. a. True b. False Answer: False 6. The U.S. government is one of the largest electronic data interchange (EDI) trading partners in the world. a. True b. False Answer: True 7. A problem that EDI pioneers faced was the high cost of implementation. a. True b. False Answer: True 8. Value-added networks are leased telephone lines that establish direct network connections to all trading partners of an organization. a. True b. False Answer: False 9. The increase in broadband connections in homes is a key element in the B2C component of the second wave. a. True b. False Answer: True 10. In some cases, business processes use traditional commerce activities very effectively, and technology cannot improve them. a. True b. False Answer: True 11. Irrespective of the transferability of merchandising skills to the Web, products are difficult to sell on the Web. a. True b. False Answer: False 12. A commodity it is a product or service that is hard to distinguish from the same product or service provided by other sellers. a. True b. False Answer: True 13. A product's shipping profile is a collection of details about the shipper. a. True b. False Answer: False 14. A DVD is an excellent example of an item with a high value-to-weight ratio. a. True b. False Answer: True 15. A product that has a strong brand reputation is easier to sell over the Web than an unbranded item. a. True b. False Answer: True 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 Answer: True 17. Electronic commerce reduces the speed and accuracy with which businesses can exchange information. a. True b. False Answer: False 18. Electronic payment can be easier to audit and monitor than payment made by check. a. True b. False Answer: True 19. The legal environment in which electronic commerce is conducted is full of clear and concise laws. a. True b. False Answer: False 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 Answer: True 21. Most economists agree that markets are weak and ineffective mechanisms for allocating scarce resources. a. True b. False Answer: False 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 Answer: True 23. Buyers and sellers in commodity markets experience significant transaction costs. a. True b. False Answer: 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 Answer: True 25. A freight forwarder is a company that arranges shipping and insurance for international transactions. a. True b. False Answer: True 26. Consumer shopping on the Web is often called _________. a. B2B b. B2C c. brick and mortar retailing d. e-procurement Answer: b 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 Answer: b 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 Answer: a 29. Electronic funds transfers are also called _________. a. wire transfers b. business transfers c. data transfers d. strategic transfers Answer: a 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 Answer: d 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 Answer: a 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 Answer: b 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 Answer: d 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 Answer: a 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 c. strategic business unit d. business model Answer: d 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 Answer: c 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 Answer: c 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 Answer: a 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 Answer: c 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 Answer: b 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 Answer: c 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 Answer: a 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 Answer: d 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 Answer: c 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 Answer: a 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 Answer: b 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 Answer: c 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 Answer: b 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 Answer: c 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 Answer: c 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. Answer: first-mover advantage 52. Business-to-business (B2B) electronic commerce is sometimes called _________. Answer: e-procurement e procurement 53. In _________ or telework, an employee logs in to the company network through the Internet instead of traveling to an office. Answer: telecommuting 54. _________ occurs when one business transmits computer-readable data in a standard format to another business. Answer: EDI Electronic data interchange Electronic data interchange (EDI) 55. The highly sophisticated tools for investigating patterns and knowledge contained in big data are called _________. Answer: data analytics 56. The term _________ is used in business to describe very large stores of information such as that collected by online sellers about their customers. Answer: big data 57. The term _________ refers to the theft of intellectual property from the Web. Answer: digital piracy 58. A product’s _________ is the collection of attributes that affect how easily that product can be packaged and delivered. Answer: shipping profile 59. A(n) _________ is a gathering of people who share a common interest, and this gathering takes place on the Internet. Answer: virtual community 60. Economists generally refer to large _________ as firms, or companies. Answer: hierarchical business organizations 61. Multiple firms that sell similar products to similar customers make up a(n) _________. Answer: industry 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. Answer: Smartphones Smartphone 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. Answer: strategic business business 64. The law of _________ says that most activities yield less value as the amount of consumption increases. Answer: diminishing returns 65. Departments devoted to negotiating purchase transactions with suppliers are called _________. Answer: procurement supply management 66. Human resource management and purchasing activities, which are part of a value chain model, are known as _________. Answer: supporting activities 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. Answer: primary activities 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. Answer: bonded warehouse 69. Software translation is also referred to as _________ translation. Answer: machine 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. Answer: localization 71. The only difference a buyer perceives when shopping for a commodity item is its _________. Answer: price 72. The combination of language and customs is often called _________. Answer: culture 73. _________ is a category of electronic commerce that includes individuals who buy and sell items among themselves. Answer: Customer-to-customer C2C Customer-to-customer (C2C) 74. A(n) _________ is a company that arranges the payment of tariffs and compliance with customs laws for international shipments. Answer: customs broker 75. A(n) _________ is a task performed by a worker in the course of doing his or her job. Answer: business activity 76. List the three categories of electronic commerce that are most commonly used. Answer: The three categories that are most commonly used are: • Consumer shopping on the Web, often called business-to-consumer (or B2C) • Transactions conducted between businesses on the Web, often called business-to-business (or B2B) • Business processes in which companies, governments, and other organizations use Internet technologies to support selling and purchasing activities 77. What types of business processes are well suited to electronic commerce? Answer: The following business processes are well suited to electronic commerce: Sale/purchase of books and CDs, sale/purchase of goods that have strong brand reputations, online delivery of software and digital content, sale/purchase of travel services, online shipment tracking, and sale/purchase of investment and insurance products. 78. What are transaction costs? Answer: Transaction costs are the total of all costs that a buyer and a seller incur as they gather information and negotiate a purchase-and-sale transaction. Although brokerage fees and sales commissions can be a part of transaction costs, the cost of information search and acquisition is often far larger. Another significant component of transaction costs 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. 79. List the primary and supporting activities organized by a value chain for a strategic business unit. Answer: For each business unit, the primary activities are as follows: 1) identify customers, 2) design, 3) purchase materials and supplies, 4) manufacture product or create service, 5) market and sell, 6) deliver, and 7) provide after-sale service and support. The support activities include: 1) finance and administration, 2) human resources, and 3) technology development. 80. What are the SWOT analysis questions that an analyst should be asking to identify an organization's strengths and weaknesses? Answer: An analyst conducting a SWOT analysis should ask the following questions. Strengths What does the company do well? Is the company strong in its market? Does the company have a strong sense of purpose and the culture to support that purpose? Weaknesses What does the company do poorly? What problems could be avoided? Does the company have serious financial liabilities? Chapter 02: Technology Infrastructure: The Internet and the World Wide Web 1. Networks of computers and the Internet that connects them to each other form the basic technological structure that underlies virtually all electronic commerce. a. True b. False Answer: True 2. The USENET was the earliest of the networks that eventually combined to become what we now call the Internet. a. True b. False Answer: False 3. E-mail was born in 1972 when a researcher wrote a program that could send and receive messages over the Defense Department network. a. True b. False Answer: True 4. The first e-mail mailing lists appeared on military and education research networks. a. True b. False Answer: True 5. A network of computers that are located in the same building is called a wide area network. a. True b. False Answer: False 6. The Internet provides a high degree of security in its basic structure. a. True b. False Answer: False 7. Extranets were used to save money and increase efficiency by replacing traditional communication tools such as fax, telephone, and overnight express document carriers. a. True b. False Answer: True 8. An intranet extends beyond the organization that created it. a. True b. False Answer: False 9. The word "virtual," used as part of virtual private networks means that the network connection is permanent. a. True b. False Answer: False 10. Virtual private network software must be installed on the computers at both ends of a transmission. a. True b. False Answer: True 11. Public networks, private networks, and VPNs are independent of organizational boundaries. a. True b. False Answer: True 12. IP addresses appear as five decimal numbers separated by periods. a. True b. False Answer: False 13. Simple Mail Transfer Protocol (SMTP) is a common protocol used for sending and retrieving e-mail. a. True b. False Answer: True 14. Post Office Protocol (POP) allows the user to view only the header and the e-mail sender’s name before deciding to download the entire message. a. True b. False Answer: False 15. The Post Office Protocol (POP) provides support for Multipurpose Internet Mail Extensions (MIME). a. True b. False Answer: True 16. At a technological level, the Web is nothing more than software that runs on computers that are connected to the Internet. a. True b. False Answer: True 17. The Semantic Web project envisions words on Web pages being tagged with their meanings. a. True b. False Answer: True 18. An HTML document is similar to a word-processing document in that it specifies how a particular text element will appear. a. True b. False Answer: False 19. The leftmost part of a domain name is called a top-level domain (TLD). a. True b. False Answer: False 20. The Internet Corporation for Assigned Names and Numbers (ICANN) has the responsibility of managing domain names and coordinating them with the IP address registrars. a. True b. False Answer: True 21. The most important parts of a Web page are the graphics, photographs, and small programs that run in the Web browser. a. True b. False Answer: False 22. SGML offers a system of marking up documents that is independent of any software application. a. True b. False Answer: True 23. The term "cascading" is used in cascading style sheets because designers can apply many style sheets to the same Web page, one on top of the other. a. True b. False Answer: True 24. The higher the bandwidth, the faster the transmission of data through a communication medium. a. True b. False Answer: True 25. A hierarchical hyperlink structure resembles conventional paper documents in that the reader begins on the first page and clicks the Next button to move to the next page in a serial fashion. a. True b. False Answer: False 26. The combination of telephone lines and the closed switches that connect them to each other is called a _________. a. LAN b. WAN c. circuit d. pathway Answer: c 27. Files and e-mail messages sent over the Internet are broken down into small pieces called _________. a. messages b. switches c. circuits d. packets Answer: d 28. The computers that decide how best to forward each packet from one network to another are called _________. a. switches b. bridges c. routers d. repeaters Answer: c 29. The programs on gateway computers that determine the best path on which to send each packet contain rules called _________. a. program profilers b. empirical algorithms c. software profilers d. routing algorithms Answer: d 30. A _________ is a permanent telephone connection between two points. a. dedicated line b. party line c. leased line d. local line Answer: c 31. _________ creates a private passageway through the public Internet that provides secure transmission from one computer to another. a. IP tunneling b. Circuit switching c. Encapsulation d. Subnetting Answer: a 32. _________ is a connection that uses public networks and their protocols to send data using a technology called IP tunneling. a. A personal area network b. The Internet c. A virtual private network d. The World Wide Web Answer: c 33. A _________ is a collection of rules for formatting, ordering, and error checking data sent across a network. a. style sheet b. semantic c. protocol d. packet Answer: c 34. _________ determine how a sending device indicates that it has finished sending a message and how the receiving device indicates that it has received the message. a. Routers b. Semantics c. Protocols d. Switches Answer: c 35. The 32-bit number used to identify computers connected to the Internet is known as the _________. a. IP address b. NSAP address c. MAC address d. OUI address Answer: a 36. _________ specifies the format of a mail message and describes how mail is to be administered on the e-mail server and transmitted on the Internet. a. Multipurpose Internet Mail Extensions (MIME) b. Simple Mail Transfer Protocol (SMTP) c. Interactive Mail Access Protocol (IMAP) d. Post Office Protocol (POP) Answer: b 37. In subnetting, a computer called a _________ device converts private IP addresses into normal IP addresses when it forwards packets from those computers to the Internet. a. Network Address Translation (NAT) b. Network Interface Controller (NIC) c. Generic Routing Encapsulation (GRE) d. Data Circuit-Terminating (DCE) Answer: a 38. The combination of a protocol name and a domain name is called a(n) _________. a. Uniform Resource Locator (URL) b. Internationalized Resource Identifier (IRI) c. Extensible Resource Descriptor Sequence (XRDS) d. Extensible Resource Identifier (XRI) Answer: a 39. IPv6 uses a _________ number for addresses. a. 32-bit b. 56-bit c. 128-bit d. 48-bit Answer: c 40. The purpose of a(n) _________ is to respond to requests for Web pages from Web clients. a. DNS server b. e-mail server c. Web server d. database server Answer: c 41. _________ is a set of rules for handling binary files, such as word-processing documents, spreadsheets, photos, or sound clips that are attached to e-mail messages. a. SMTP b. TCP/IP c. MIME d. POP Answer: c 42. A newer e-mail protocol that performs the same basic functions as POP, but includes additional features, is known as _________. a. IMAP b. SMTP c. POP3 d. TCP Answer: a 43. _________ let’s users create and manipulate e-mail folders and individual e-mail messages while the messages are still on the e-mail server. a. POP b. SMTP c. IMAP d. MIME Answer: c 44. A _________ structure resembles an inverted tree in which the root is at the top and the branches are below it. a. parabolic hyperlink b. hierarchical hyperlink c. rooted hyperlink d. linear hyperlink Answer: b 45. A(n) _________ has a hypertext reference (HREF) property, which specifies the remote or local document’s address. a. closing tag b. paragraph tag c. opening tag d. bold tag Answer: c 46. HTML was developed by _________. a. Robert Kahn b. Vinton Cerf c. Ted Nelson d. Tim Berners-Lee Answer: d 47. _________ was the first Web browser that became widely available for personal computers. a. Mosaic b. Netscape c. Internet Explorer d. CompuServe Answer: a 48. _________ are sets of words that are assigned to specific IP addresses. a. Domain names b. URLs c. Octets d. Headers Answer: a 49. The early versions of _________ let Web page designers create text-based electronic documents with headings, title bar titles, bullets, lines, and ordered lists. a. HTTP b. HTML c. SGML d. XML Answer: b 50. In HTML, hyperlinks are created using the HTML _________ tag. a. head b. anchor c. title d. opening Answer: b 51. A(n) _________ is any technology that allows people to connect computers to each other. Answer: computer network 52. A computer network which uses a specific set of rules and connects networks all over the world to each other is called the _________. Answer: Internet 53. _________ is a subset of the computers on the Internet that are connected to one another in a specific way that makes them and their contents easily accessible to each other. Answer: World Wide Web (WWW) WWW World Wide Web 54. A(n) _________ is an e-mail address that forwards any message it receives to any user who has subscribed to the list. Answer: mailing list 55. In 1979, a group of students and programmers at Duke University and the University of North Carolina started _________, which allows anyone who connects to the network to read and post articles on a variety of subjects. Answer: Usenet User's News Network User's News Network (Usenet) 56. Usenet survives on the Internet today, with more than 1000 different topic areas that are called _________. Answer: newsgroups 57. Internet _________ are computers that are directly connected to the Internet. Answer: hosts 58. Companies known as _________ sell Internet access rights directly to larger customers and indirectly to smaller firms and individuals through other companies, called ISPs. Answer: network access providers 59. The subset of the Internet that includes computers and sensors connected to each other for communication and automatic transaction processing is called the _________. Answer: Internet of Things 60. A(n) _________ is a set of standards that defines, in detail, the relationships among resource description framework (RDF) standards and specific extensible markup language (XML) tags within a particular knowledge domain. Answer: ontology 61. A group of network research scientists from nearly 200 universities and a number of major corporations joined together in 1996 to recapture the original enthusiasm of the ARPANET and created an advanced research network called _________. Answer: Internet2 62. A(n) _________ is used when the Internet extends beyond the boundaries of an organization and includes networks of other organizations. Answer: extranet 63. The _________ controls the disassembly of a message or a file into packets before it is transmitted over the Internet, and it controls the reassembly of those packets into their original formats when they reach their destinations. Answer: Transmission Control Protocol TCP Transmission Control Protocol (TCP) 64. The _________ in TCP/IP specifies the addressing details for each packet, labeling each with the packet's origination and destination addresses. Answer: Internet Protocol IP Internet Protocol (IP) 65. The set of rules for delivering Web page files over the Internet is in a protocol called the _________. Answer: Hypertext Transfer Protocol (HTTP) 66. A(n) _________ is a computer that stores files written in HTML. Answer: hypertext server 67. A(n) _________ is a language that can be used to define other languages. Answer: metalanguage 68. HTML, XML, and XHTML have descended from the original _________ specification. Answer: Standard Generalized Markup Language (SGML) Standard Generalized Markup Language SGML 69. In HTML, the text elements that are related to each another are called _________ elements. Answer: hypertext 70. A(n) _________ hyperlink structure resembles conventional paper documents in that the reader begins on the first page and clicks a Next button to move to the next page in a serial fashion. Answer: linear 71. A(n) _________ is a set of instructions that gives Web developers more control over the format of displayed pages. Answer: style sheet 72. _________ uses paired start and stop tags in much the same way as database software defines a record structure. Answer: XML Extensible Markup Language (XML) Extensible Markup Language 73. _________ tags convey the meaning (the semantics) of the information included within them. Answer: Extensible Markup Language (XML) Extensible Markup Language XML 74. _________ is the amount of data that can travel through a communication medium per unit of time. Answer: Bandwidth 75. _________ is a measure of the amount of information that can travel from a user to the Internet in a given amount of time. Answer: Upstream bandwidth Upload bandwidth 76. Describe the process of routing packets in a network. Answer: As an individual packet travels from one network to another, the computers through which the packet travels determine the most efficient route for getting the packet to its destination. The most efficient route changes from second to second, depending on how much traffic each computer on the Internet is handling at each moment. The computers that decide how to best forward each packet are called routing computers, router computers, routers, gateway computers (because they act as the gateway from a LAN or WAN to the Internet), border routers, or edge routers (because they are located at the border between the organization and the Internet or at the edge of the organization.) The programs on the routers that determine the best path on which to send each packet contain rules called routing algorithms. The programs apply these algorithms to information they have stored in routing tables or configuration tables. This information includes lists of connections that lead to particular groups of other routers, rules that specify which connection to use first, and rules for handling instances of heavy packet traffic and network congestion. 77. What is the difference between a public network and a private network? Answer: A public network is any computer network or telecommunications network that is available to the public. The Internet is one example of a public network. Public networks such as the Internet do not provide much security as part of their basic structures. A private network is a leased-line connection between two companies that physically connects their computers and/or networks to one another. A leased line is a permanent telephone connection between two points. Unlike the telephone circuit connection you create when you dial a telephone number, a leased line is always active. The advantage of a leased line is security. Only the two parties that lease the line to create the private network have access to the connection. 78. Identify the four key rules for message handling. Answer: The open architecture philosophy developed for the evolving ARPANET, which later became the core of the Internet, included the use of a common protocol for all computers connected to the Internet and four key rules for message handling: 1) Independent networks should not require any internal changes to be connected to the network. 2) Packets that do not arrive at their destinations must be retransmitted from their source network. 3) Router computers act as receive-and-forward devices; they do not retain information about the packets that they handle. 4) No global control exists over the network. 79. Describe the two main protocols used by the Internet. Answer: The Internet uses two main protocols: the Transmission Control Protocol (TCP) and the Internet Protocol (IP). The TCP controls the disassembly of a message or a file into packets before it is transmitted over the Internet, and it controls the reassembly of those packets into their original formats when they reach their destinations. The IP specifies the addressing details for each packet, labeling each with the packet’s origination and destination addresses. 80. What are the advantages of Bluetooth technology? Answer: One major advantage of Bluetooth technology is that it consumes very little power, which is an important consideration for many devices. Another advantage is that Bluetooth devices can discover each other and exchange information automatically. For example, a person using a laptop computer in a temporary office can print to a local Bluetooth-enabled printer without logging in to the network or installing software on either device. The printer and laptop computer electronically recognize each other as Bluetooth devices and can immediately begin exchanging information. Test Bank for Electronic Commerce Gary P. Schneider 9781285425436, 9781305867819, 9781133526827
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