MCQ Question Bank

Chapter 1- Foundation
Government regulators are often up to date with technologies.
False
In many cases, government regulators have not kept up with technologies.
Laws that govern commerce were written when signed documents were a reasonable expectation in any business
transaction.

The practice of an existing firm replacing one or more of its supplier markets with its hierarchical structure for creating
the supplied product is called horizontal integration.
False
The practice of an existing firm replacing one or more of its supplier markets with its hierarchical structure for creating
the supplied product is called vertical integration.

In the general economic recession that started in 2008, eCommerce was hurt higher than most of the economy.
False
In the general economic recession that started in 2008, eCommerce was hurt less than most of the economy.

The only advantages of eCommerce are increased sales and decreased costs.
False
The main advantages of eCommerce are increased sales and decreased costs.

A business activity is a collection of linked tasks that find their end in the delivery of a service or product to a client.
False
A business process is a collection of linked tasks that find their end in the delivery of a service or product to a client.

The most common eCommerce categories are business-to-consumer, business-to-business, business processes,
consumer-to-consumer, and business-to-government.
False
The most common eCommerce categories are business-to-consumer, business-to-business, consumer-to-consumer,
and business-to-government.

Ebusiness is the primary motivation for moving economic activity from markets to hierarchically structured firms.
False
Transaction costs were the primary motivation for moving economic activity from markets to hierarchically structured
firms.

ECommerce immediately became a significant part of the total economy.

False
ECommerce gradually became a significant part of the total economy.

Businesses have improved the promotion, marketing, and delivery of existing offerings using business processes.
False
Businesses have improved the promotion, marketing, and delivery of existing offerings using ebusiness technologies.

Some businesses spend a lot of time and money entering data into their computers, printing paper forms, and then
reentering the data because they have an integrated system.
False
Some businesses spend a lot of time and money entering data into their computers, printing paper forms, and then
reentering the data because they do NOT have an integrated system.

The third wave will fulfill the promise of the legal distribution of music, video, and other digital products on the Web.
False

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The second wave is fulfilling the promise of available technology by supporting the legal distribution of music, video,
and other digital products on the Web.

E-commerce can make vertical integration unappealing by increasing the cost of searching for potential buyers and
sellers.
False
E-commerce can make vertical integration appealing by reducing the cost of searching for potential buyers and
sellers.
E-commerce can make vertical integration appealing by increasing the number of potential market participants.

Between 2000 and 2003, many industry observers were writing obituaries for eCommerce because of the dot-com
boom.
False
Between 2000 and 2003, many industry observers were writing obituaries for eCommerce because of the dot-com
bust.

Internet technologies have limited areas to improve business processes.

False
Internet technologies improve so many business processes that it can take time for managers to decide where and
how to use them.

Small and medium companies had invested large amounts of money in their EDI systems and had built many of their
sales, purchasing, and accounting systems around EDI.
False
Large companies had invested large amounts of money in their EDI systems and had built many of their sales,
purchasing, and accounting systems around EDI.

A business model is a set of processes that combine to achieve a company’s profit.

False
A business model is a set of processes that combine to achieve a company’s various goals, including profit.

The textbook use e-commerce in a limited sense and does not include internal business activities.
False
The textbook use e-commerce in its broadest sense and includes all business activities that use Internet technologies.

B2B transactions and internal business processes use internet technologies as well as bar codes and scanners.
False
B2B transactions and internal business processes use internet technologies like bar codes and scanners.

During the first wave, companies devised ways to deliver context-specific ads to Internet users.
False
During the second wave, companies devised ways to deliver context-specific ads to Internet users.

Website visitors need to research competitors before becoming a customer of a company.

False
Website visitors need to trust a company before becoming a customer.
Website visitors need to learn about a company before becoming a customer.

The only difference a buyer perceives when shopping for a commodity item is its quality.
False
The only difference a buyer perceives when shopping for a commodity item is its price.

Close partnerships online result in virtual companies.

False
Strategic alliances or strategic partnerships online results in virtual companies.

A XML is an independent firm that offers connection and transaction-forwarding services to buyers and sellers
engaged in EDI.
False
A VAN is an independent firm that offers connection and transaction-forwarding services to buyers and sellers
engaged in EDI.

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A critical business 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.
False
A strategic business unit (SBU) 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.

Customers can use eCommerce to reduce transaction costs by improving the flow of information and increasing the
coordination of actions across departments.
False
Businesses can use eCommerce to reduce transaction costs by improving the flow of information and increasing the
coordination of actions across departments.

The advent of computers brought tremendous increases in the ability of operatives to monitor and control the detailed
activities of their subordinates.
False
The advent of computers brought tremendous increases in the ability of upper-level managers to monitor and control
the detailed activities of their subordinates.

Many companies and investors believe that being the first website to offer a particular type of product or service would
give them an opportunity to be successful.
False
In the first wave of eCommerce, many companies and investors believed that being the first website to offer a
particular product or service would allow them to succeed.

Most successful first-wave companies could not continue in the second-wave.

False
Most successful first-wave companies continue to thrive by offering increasingly innovative products and services in
the second-wave.

The inherently global nature of electronic commerce leads to many opportunities and many challenges.
False
The inherently global nature of electronic commerce leads to many opportunities and a few challenges.

ECommerce initiatives have limited value in reducing transaction costs or creating a network effect.
False
Most eCommerce initiatives add value by either reducing transaction costs, creating a network effect, or combining
them.

Doing EDI means buying expensive computer hardware and software and establishing direct network connections to
all trading partners or subscribing to a value-added network.
False
Until the late 1990s, doing EDI meant buying expensive computer hardware and software and establishing direct
network connections to all trading partners or subscribing to a value-added network..

Most people find information on the Web about new and used automobiles and do considerable research on specific
makes and models before they buy it from there.
False
Most people find information on the Web about new and used automobiles and do considerable research on specific
makes and models before they visit a dealership to buy.

Examples of business models include managing transportation and managing a business's finances.
False
Examples of business processes include managing transportation and managing a business's finances.

The Internet technologies used in the first wave, especially in B2C commerce, were slow and expensive.
False
The Internet technologies used in the first wave, especially in B2C commerce, were slow and inexpensive.

The increase in home broadband connections has a limited effect to the second wave.

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False
The increase in home broadband connections is a critical element of the second wave.

Web 3.0 include software that allows Web site users to participate in creating, editing, and distributing content on a
Web site owned and operated by a third party.
False
Web 2.0 include software that allows Web site users to participate in creating, editing, and distributing content on a
Web site owned and operated by a third party.

It will be very difficult if not impossible to resolve the technology and culture-related challenges of ebusiness.
False
As more businesses and individuals find eCommerce's benefits compelling, technology and culture-related
disadvantages are getting resolved.

Many investors try to find start-up companies with novel internet-driven business models expecting this to lead to
rapid sales growth and market dominance.
False
In the first wave of eCommerce, many investors tried to find start-up companies with novel internet-driven business
models expecting this to lead to rapid sales growth and market dominance.

A firm's economic viability depends on its ability to track operational activities effectively at the highest levels of the
firm.
False
A firm's economic viability depends on its ability to track operational activities effectively at the lowest levels of the
firm.

Negotiating price and delivery terms are easier in traditional commerce because it can help companies efficiently
obtain competitive bid information.
False
Negotiating price and delivery terms are easier in eCommerce because the Internet can help companies efficiently
obtain competitive bid information.

Buyers and sellers in commodity markets experience significant transaction costs.

False
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such
as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil.
Buyers and sellers in commodity markets experience low transaction costs.

Cost is a function of technology, and it can increase dramatically with the invention of new technology.
False
Cost is a function of technology, and it can decrease dramatically with the invention of new technology.

The availability of smartphones and the low cost of Internet connectivity have made mobile commerce possible albeit
on a small scale.
False
The availability of smartphones and the low cost of Internet connectivity have made mobile commerce possible on a
large scale.

ECommerce can reduce the time buyers must wait for their purchases.
True
Most digital products, such as software, music, videos, and images, can be delivered through the Internet, reducing
the time buyers wait to begin enjoying their purchases.

Companies like Pran Foods must be able to transfer their merchandising skills to the Web for their Web sites to be
successful.
False
Pran is a manufacturing organization and does not do merchandising.

The Internet has a limited impact on how people buy, sell, hire, and organize business activities.
xxx False
The Internet has changed how people buy, sell, hire, and organize business activities in more ways and more rapidly
than any other technology in the history of business.

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Most firms that conduct business internationally rely on a complex array of freight-forwarding companies, customs
brokers, international freight carriers, bonded warehouses, and importers to navigate the maze of paperwork that
must be completed at every step of the transaction to satisfy government and insurance requirements.
True

The "bust" that was so widely reported in the media was a total collapse.
False
The "bust" that was so widely reported in the media was really more of a slowdown than a collapse.

xxx - xxx - xxx - xxx - xxx - xxx

All ___ involve one or more ____.

transactions, business process
correct- transactions, activity
larger, major

Items that are __ to electronic commerce include those that appeal to small but geographically dispersed, groups of
customers.
correct- well-suited
not well suited
discluded
traditional

Companies that operate only online are often called ___ businesses to distinguish them from companies that operate
in physical locations (solely or together with online operations).
correct- dot-com or pure dot-com
brick and mortar
offline
online

Beginning in 2003, companies that had survived the ___ were not only seeing growth in sales again, but many of
them were showing profits.
dot-com boom
tumultuous period
correct- dot-com bust
tumultuous session

Some people use the term electronic business (or e-business) when they are talking about electronic commerce in
this ___ sense.
modern
correct- broader
smaller
traditional

During ___, the price of those ideas increased. Many good ideas needed better implementation. Worse, several bad
ideas were proposed and funded.
the current wave
the second wave
correct- the first wave
the third wave

The following are part of ... cost.

brokerage fees and sales commissions
cost of information search and acquisition
investment in equipment
hiring of skilled employees
correct- transaction
model
business

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___ have its own mission and objectives; therefore, they have its own strategies for marketing, product development,
purchasing, and long-term growth.
correct- SBUs within an organization
B2B organizations
B2C organizations

Transferring funds, placing orders, sending invoices, and shipping goods to customers are ___.
transactions
correct- both activities and transactions
activities

Commercial real estate sales involve large amounts of money and high interpersonal trust. It is suitable for ...
traditional commerce
correct- ecommerce and traditional commerce working together
both ecommerce and traditional commerce
ecommerce

The measured and carefully considered investments of the second wave are helping electronic commerce grow
more ...
slowly
steadily
correct- both more steadily and more slowly.

___ commerce increases the speed and accuracy with which businesses can exchange information.
Electronic and traditional
Traditional
correct- Electronic

A ___ is a specific collection of business processes used to identify customers, market to those customers, and
generate sales to those customers.
ebusiness model
correct- revenue model
business model

A site’s ___ allows it to charge ___ rates for advertising.

algorithm, higher
correct- popularity, higher
technology, higher
technology, lower

As more people or organizations participate in a network, the value of the network to each participant ___.
correct- increases
decreases
remains the same

___ is the application of new technologies, particularly Internet and Web technologies, to help individuals, businesses,
and other organizations conduct business more effectively.
Traditional business
Traditional commerce
Electronic commerce
correct- Electronic business

Expensive jewelry has a high value-to-weight ratio, but many people are reluctant to buy it without examining it in
person unless it is ...
of a low weight.
of a low cost.
correct- branded.
low priced.
The business process of shipping goods to customers does NOT include activities like ...
correct- selling the product
inspecting the goods
packing the goods

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negotiating with a freight company
creating and printing the shipping documents
loading the goods onto the truck

___ can also make products and services available in remote areas. For example, distance learning allows people to
learn skills and earn degrees no matter where they live or which hours they have available for study.
Traditional commerce
correct- Electronic commerce
Electronic sales

In terms of dollar volume and number of transactions, ___ electronic commerce is much greater than B2C electronic
commerce.
B2C
correct- B2B
G2B
B2G
C2C

In the ___ wave, established companies are using their own internal funds to finance gradual expansion of electronic
commerce opportunities.
first
correct- second
third

Electronic data interchange (EDI) occurs when one business transmits computer-readable data in a standard format
to another company. These documents include(s).
invoices
bills of lading
purchase orders
Some of these
correct- All of these

Examples of ___ include purchasing raw materials or goods for resale and converting materials and labor into finished
goods.
correct- business processes
business transaction
business activity
Electronic commerce

By creating a set of standard formats for transmitting the information electronically, businesses were NOT able to ___.
reduce errors
avoid printing and mailing costs
correct- increase in-person communication
eliminate the need to reenter the data
Google's ___, which has been continually improved, was much better at providing users with relevant results than
other search engines.
supporting activities
algorithm
correct- page ranking system

A product's __ is the attributes that affect how easily that product can be packaged and delivered.
value-to-weight ratio
shipping cost
correct- shipping profile

During the ____ wave, the music recording industry could not devise a way to distribute digital music on the Web,
resulting in an environment where digital piracy became rampant.
correct- first
third
second

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The logical, related, and sequential activities and transactions in which businesses engage are often collectively
referred to as ___.
business activities
correct- business processes
business transactions

A ___ is an exchange of value, such as a purchase, a sale, or converting raw materials into a finished product.
activity
correct- transaction
business process
online process

Most companies realize that copying or adapting someone else's business model is neither an easy nor wise road
map to success. This is accurate for ___ wave of ecommerce.
first
xxx second
third
none of these
all of these

In the ___ wave, integrated systems allow companies to communicate with each other and share transactions,
inventory levels, and customer demand information.
first
correct- second
third

The ___ wave is characterized by its ___ scope, with sellers doing business in many countries and in many
languages.
correct- first, local
correct- second, international
third, local
first, international
second, local

As the economy grew, eCommerce grew at ___ pace.

the same
Correct- a more rapid
a slower
a similar

Google developed search ___ based on the number of links a particular Web page had to and from other highly
relevant pages.
Web 2.0
page ranking
correct- algorithms

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