Electronic Commerce 2012, 7E (Turban)
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Chapter 2 E-Commerce: Mechanisms, Infrastructure, and Tools
2.1 True/False
1) Eastern Mountain Sports uses Web 2.0 tools to increase collaboration, information sharing, and communication among their employees, suppliers, and customers.
Answer: TRUE
Diff: 2 Page Ref: 46
2) A dashboard is a graphical display of performance results.
Answer: TRUE
Diff: 1 Page Ref: 46
3) Intermediation is the process of buying materials, products, and services directly from suppliers, distributors, or the government.
Answer: FALSE
Diff: 3 Page Ref: 49
4) Dynamic pricing is the most common way customers purchase items online.
Answer: FALSE
Diff: 2 Page Ref: 49
5) The emergence of electronic marketplaces has resulted in lower information search time and costs for buyers.
Answer: TRUE
Diff: 1 Page Ref: 51
6) In marketing, an intermediary is a third party that operates between manufacturers and buyers. Intermediaries of all kinds offer their services on the Web.
Answer: TRUE
Diff: 2 Page Ref: 52
7) Individuals are the largest consumers, accounting for more than 85 percent of EC volume and value activities.
Answer: FALSE
Diff: 2 Page Ref: 52
8) Disintermediation is the elimination of intermediaries between sellers and buyers.
Answer: TRUE
Diff: 2 Page Ref: 53
9) Travelers using airline Web sites to book their flights directly, without the use of travel agents, is resulting in the reintermediation of travel agents.
Answer: FALSE
Diff: 3 Page Ref: 53
10) A single-sided e-marketplace is a private e-marketplace in which one company makes purchases from invited suppliers.
Answer: FALSE
Diff: 2 Page Ref: 54
11) Private and public are two types of e-marketplaces.
Answer: TRUE
Diff: 1 Page Ref: 54
12) Electronic storefronts, Internet malls, and exchanges are major B2B e-marketplaces.
Answer: FALSE
Diff: 1 Page Ref: 55
13) Microsite refers to a page or pages that are meant to function as an auxiliary supplement to a primary website.
Answer: TRUE
Diff: 1 Page Ref: 55
14) A Web portal is a single point of access, through a Web browser, to critical business information loaded inside and outside (via Internet) an organization.
Answer: TRUE
Diff: 2 Page Ref: 56
15) Pure-play stores sell only one or a few kinds of products.
Answer: FALSE
Diff: 2 Page Ref: 56
16) A widget is an element of user interface that displays an information arrangement changeable by the user, such as a window.
Answer: TRUE
Diff: 2 Page Ref: 57
17) The two major types of online intermediaries are infomediaries and negotiators.
Answer: FALSE
Diff: 2 Page Ref: 58
18) A shopping facilitator is a type of broker and helps consumers compare prices and service at different stores.
Answer: FALSE
Diff: 2 Page Ref: 58
19) WebMD, which is the largest U.S. medical services company, is known mainly for its webmd.com consumer portal, but its core business is being an e-intermediary.
Answer: TRUE
Diff: 1 Page Ref: 59
20) A desktop search is conducted by tools that search only the contents of the user's own computer files.
Answer: TRUE
Diff: 1 Page Ref: 61
21) Search engines not only "search and match," but also have capabilities that can be used to perform routine tasks that require intelligence.
Answer: FALSE
Diff: 1 Page Ref: 62
22) Shopping carts for B2B are fairly simple, but a shopping cart for B2C may be more complex.
Answer: FALSE
Diff: 2 Page Ref: 63
23) An electronic shopping cart is an order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop.
Answer: TRUE
Diff: 1 Page Ref: 63
24) An auction is a competitive process and market mechanism that uses a competitive process by which a seller solicits consecutive bids from buyers or a buyer solicits bids from sellers.
Answer: TRUE
Diff: 1 Page Ref: 64
25) Forward auctions are bidding or tendering systems in which the buyer places an item for bid on a request for quote (RFQ) system; then potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins.
Answer: FALSE
Diff: 3 Page Ref: 66
26) Reverse auctions are primarily B2C.
Answer: FALSE
Diff: 2 Page Ref: 66
27) English and Yankee are the two major types of double auctions.
Answer: FALSE
Diff: 2 Page Ref: 66
28) E-auctions are becoming less important selling and buying channels for companies and individuals.
Answer: FALSE
Diff: 1 Page Ref: 67
29) The major limitations of e-auctions are minimal security, possibility of fraud, and a limited participation.
Answer: TRUE
Diff: 2 Page Ref: 68
30) A limitation of e-bartering for businesses is that excess capacity items such as office space, storage, factory space, idle facilities, and labor cannot be bartered.
Answer: FALSE
Diff: 2 Page Ref: 69
31) Bartering is the exchange of goods and services.
Answer: TRUE
Diff: 1 Page Ref: 69
32) Twitter is a free microblogging service that allows its users to send and read other users' updates.
Answer: TRUE
Diff: 1 Page Ref: 73
33) E-marketplaces, shopping carts, e-catalogs, and auctions are the major Web 2.0 mechanisms.
Answer: FALSE
Diff: 3 Page Ref: 75
34) An auction is the most popular type of virtual community.
Answer: FALSE
Diff: 1 Page Ref: 80
35) Net neutrality is a big advantage of Web 3.0.
Answer: FALSE
Diff: 2 Page Ref: 89
2.2 Multiple Choice
1) The entertainment EC activity is supported by
A) Web 2.0 tools.
B) e-auctions.
C) electronic markets.
D) storefronts.
Answer: A
Diff: 2 Page Ref: 48
2) EC activities include
A) trading, buy, sell, and exchange.
B) communicate, collaborate, and learn.
C) improve performance.
D) all of the above.
Answer: D
Diff: 1 Page Ref: 48
3) Traditional and electronic markets have three main functions, which include each of the following except
A) matching buyers and sellers.
B) facilitating the exchange of information, goods, services, and payments associated with market transactions.
C) financing the transformation of raw materials into finished products.
D) providing an institutional infrastructure, such as a legal and regulatory framework that enables the efficient functioning of the market.
Answer: C
Diff: 1 Page Ref: 50
AACSB: Use of information technology
4) An online market, usually B2B, in which buyers and sellers exchange goods or services best defines
A) cybermarket.
B) e-marketplace.
C) auction site.
D) cyberstore.
Answer: B
Diff: 2 Page Ref: 51
5) The emergence of electronic marketplaces changed several of the processes used in trading and supply chains including
A) lowering information search time and cost for buyers.
B) the ability of buyers, sellers, and the virtual market to each be in a different location.
C) the ability for EC to leverage capabilities with increased effectiveness and lower transaction and distribution costs, leading to more efficient "friction-free" markets.
D) all of the above.
Answer: D
Diff: 2 Page Ref: 51
6) The portion of an e-seller's business through which customers interact, including the seller's portal, electronic catalogs, shopping cart, and payment gateway is referred to as the ______of the business.
A) front end
B) back end
C) infrastructure
D) intermediary
Answer: A
Diff: 2 Page Ref: 52
AACSB: Use of information technology
7) Each of the following is a major component and player in a marketspace except
A) auctions.
B) products and services.
C) infrastructure.
D) front end.
Answer: A
Diff: 3 Page Ref: 52
8) Activities related to order aggregation and fulfillment, inventory management, purchasing from suppliers, accounting and finance, packaging, and delivery are done in what is termed the ______of the business.
A) front end
B) back end
C) infrastructure
D) intermediary
Answer: B
Diff: 2 Page Ref: 52
AACSB: Use of information technology
9) The elimination of various types of agents that mediate between buyers and sellers, such as travel and insurance agents, is referred to as
A) automation.
B) disintermediation.
C) remediation.
D) e-distribution.
Answer: B
Diff: 2 Page Ref: 53
AACSB: Use of information technology
10) A private e-marketplace in which one company sells either standard and/or customized products to qualified companies best defines
A) buy-side e-marketplace.
B) sell-side e-marketplace.
C) Webstore.
D) hidden e-marketplace.
Answer: B
Diff: 2 Page Ref: 54
11) Online markets that are owned and operated by a single company and that are either sell-side or buy-side are known as
A) private e-marketplaces.
B) commercial portals.
C) e-malls.
D) B2B marketplaces.
Answer: A
Diff: 2 Page Ref: 54
AACSB: Use of information technology
12) Each of the following is a true statement about public e-marketplaces except
A) public marketplaces are usually B2B markets.
B) public marketplaces are often owned by a third party.
C) public marketplaces are not regulated by the government.
D) public marketplaces serve many sellers and buyers.
Answer: C
Diff: 3 Page Ref: 54
13) The major ______mechanisms are storefronts and Internet malls.
A) B2B
B) C2B
C) B2B2C
D) B2C
Answer: D
Diff: 3 Page Ref: 55
AACSB: Use of information technology
14) An electronic storefront includes several mechanisms that are needed for conducting the sale. The most common mechanisms include each of the following except
A) electronic catalog.
B) search engine.
C) supply chain.
D) payment gateway.
Answer: C
Diff: 2 Page Ref: 55
AACSB: Use of information technology
15) Types of stores and malls include
A) general stores/malls.
B) specialized stores/malls.
C) pure-play stores.
D) all of the above.
Answer: D
Diff: 1 Page Ref: 56
16) A(n) ______is a single point of access, through a Web browser, to critical business information located inside and outside (via Internet) an organization.
A) browser
B) intermediary
C) Web portal
D) search engine
Answer: C
Diff: 2 Page Ref: 56
AACSB: Use of information technology
17) Electronic intermediaries that provide and/or control information flow in cyberspace, often aggregating information and selling it to others, best defines
A) infomediaries.
B) knowledge managers.
C) metamediary.
D) Webstore.
Answer: A
Diff: 2 Page Ref: 58
18) An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place best describes
A) electronic catalog.
B) e-distributor.
C) metamediary.
D) broker.
Answer: B
Diff: 2 Page Ref: 60
19) The practice of identifying and enabling specific content across the enterprise to be indexed, searched, and displayed to authorized users best describes
A) desktop search.
B) enterprise search.
C) web search.
D) portal search.
Answer: B
Diff: 2 Page Ref: 61
20) Which is not a popular search engine?
A) Google
B) Linux
C) AltaVista
D) Lycos
Answer: B
Diff: 1 Page Ref: 62
AACSB: Use of information technology
21) An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop best defines
A) intelligent agent.
B) e-fulfillment agent.
C) electronic shopping cart.
D) mobile portal.
Answer: C
Diff: 2 Page Ref: 63
AACSB: Use of information technology
22) Prices that change based on supply and demand relationships at any given time best defines
A) dynamic pricing.
B) commodity pricing.
C) pre-shopping.
D) negotiation.
Answer: A
Diff: 2 Page Ref: 64
AACSB: Use of information technology
23) An auction in which a seller entertains bids from buyers, and the bidders increase price sequentially best defines
A) forward auctions.
B) reverse auctions.
C) bidding auction system.
D) tendering system.
Answer: A
Diff: 2 Page Ref: 66
AACSB: Use of information technology
24) An auction in which the buyer places an item for bid on a request for quote system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; this describes
A) forward auctions.
B) reverse auctions.
C) bidding auction system.
D) tendering system.
Answer: B
Diff: 3 Page Ref: 66
AACSB: Use of information technology
25) An auction in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides best defines
A) forward auction.
B) reverse auction.
C) double auction.
D) penny auction.
Answer: C
Diff: 2 Page Ref: 67
26) A formal auction in which participants pay a nonrefundable small fee for each bid, and the bid level changes by small increments. This defines
A) reverse auction.
B) charge-by-bid auction.
C) forward auction.
D) penny auction.
Answer: D
Diff: 2 Page Ref: 67
27) Benefits of e-auctions to sellers include
A) anonymity.
B) convenience of bidding anywhere and any time.
C) lack of differentiation.
D) optimal price is determined by the market.
Answer: D
Diff: 2 Page Ref: 68
AACSB: Use of information technology
28) Benefits of e-auctions to buyers include
A) liquidating large quantities quickly.
B) higher repeat purchases.
C) optimal price setting determined by the market.
D) opportunities to find unique items.
Answer: D
Diff: 3 Page Ref: 68
AACSB: Use of information technology
29) A marketplace in which an intermediary arranges barter transactions best defines
A) bartering exchange.
B) forward auction.
C) blog.
D) Web portal.
Answer: A
Diff: 2 Page Ref: 69
30) Which of the following is a social software tool?
A) auctions
B) blogs
C) shopping carts
D) e-catalogs
Answer: B
Diff: 2 Page Ref: 70
AACSB: Use of information technology
31) A combination of two or more websites into a single website that provides the content of both sites to deliver a novel product to consumers best defines
A) blog.
B) mashup.
C) podcast.
D) wiki.
Answer: B
Diff: 2 Page Ref: 76
AACSB: Use of information technology
32) A method for Internet users to store, organize, search, and manage bookmarks of Web pages on the Internet with the help of metadata best defines
A) tagging.
B) filtering.
C) social bookmarking.
D) intermediating.
Answer: C
Diff: 3 Page Ref: 76
33) The practice and method of collaboratively creating, classifying, and managing tags to annotate and categorize content best defines
A) mashup.
B) tweeting.
C) social bookmarking.
D) folksonomy.
Answer: D
Diff: 3 Page Ref: 76
34) Which of the following was Stormhoek Winery's successful marketing campaign that had volunteers, over a series of days, host dinners that included tasting Stormhoek wine?
A) 100 Geek Dinners in 100 Days.
B) Stormhoek's May Wine Days.
C) Stormhoek's Friends, Dinner, and Wine.
D) Stormhoek's No Grape Before It's Time Wine Tasting Event
Answer: A
Diff: 3 Page Ref: 77
35) Types of virtual communities include each of the following except
A) relations or practices.
B) virtual worlds.
C) mashups.
D) social networks.
Answer: C
Diff: 3 Page Ref: 78
36) Which of the following refers to communities organized by interest, such as hobbies, technical topic, vocations, political parties, or trade unions?
A) association portals
B) affinity portals
C) communities of practice
D) virtual worlds
Answer: B
Diff: 2 Page Ref: 78-79
37) Facebook, LinkedIn, and catster.com are examples of
A) gender communities.
B) communities of practice.
C) virtual worlds.
D) social network sites.
Answer: D
Diff: 2 Page Ref: 79
38) Which of the following is a global, multilanguage, social network popular in Asia and parts of Europe, Africa, and South America?
A) Hi5.com
B) Piczo.com
C) Friendsreunited.co.uk
D) Iwiw.net
Answer: A
Diff: 3 Page Ref: 80-81
39) Capabilities and services provided by social networking sites include
A) discussion forums.
B) blogs for discussion and dissemination of information.
C) viewing and sharing photos, videos, and documents.
D) all of the above.
Answer: D
Diff: 1 Page Ref: 81
40) A virtual world is
A) a user-defined world in which people can interact, play, and do business.
B) a single point of access, through a Web browser, to critical business information located inside and outside (via Internet) an organization.
C) a social network whose major interest is business topics.
D) a combination of two or more websites into a single website that provides the content of both sites to deliver a novel product to consumers.
Answer: A
Diff: 2 Page Ref: 85
41) Types of business activities in virtual worlds include each of the following except
A) creating and managing a virtual business.
B) operating a bed and breakfast in Nova Scotia.
C) providing services for those who build, manage, or make money with virtual properties.
D) conducting regular business activities.
Answer: B
Diff: 2 Page Ref: 86
42) Which of the following consists of the creation of high-quality content and services produced by gifted individuals using Web 2.0 technology as an enabling platform and is used to describe the future of the World Wide Web?
A) Level 2.0
B) Web 4.0
C) Web 3.0
D) Web 5.0
Answer: C
Diff: 2 Page Ref: 87
43) An evolving extension of the Web in which Web content can be expressed not only in natural language, but also in a form that can be understood, interpreted, and used by intelligent computer software agents, permitting them to find, share, and integrate information more easily describes
A) Web 4.0.
B) Camelot Web.
C) Web 2.0.
D) Semantic Web.
Answer: D
Diff: 2 Page Ref: 88
44) Concerns about Web 3.0 implementation and the future of EC include
A) lack of net neutrality.
B) wiring for a sustainable world.
C) the use of 3-D tools.
D) ownership.
Answer: A
Diff: 3 Page Ref: 89
45) McKinsey and Company's trend predictions include(s)
A) distributed cocreation moves into the mainstream.
B) imagining anything as a service.
C) innovation coming from the bottom of the pyramid.
D) all of the above.
Answer: D
Diff: 3 Page Ref: 90
2.3 Essay
1) List three ways in which electronic marketplaces have changed the processes used in trading and supply chains.
Answer: Changes resulting from electronic marketplaces include greater information richness of the transactional and relational environment, lower information search costs for buyers, diminished information asymmetry between sellers and buyers, less time between purchase and possession of physical products purchased in the e-marketplace, greater temporal proximity between time of purchase and time of possession of digital products purchased in the e-marketplace, the ability of buyers and sellers to be in different locations, and the ability for EC to leverage capabilities with increased effectiveness and lower transaction and distribution costs.
Diff: 2 Page Ref: 51
2) Define marketspace. Identify the major components and players in the marketspace.
Answer: A marketspace is where sellers and buyers can electronically exchange goods and services for money. The major components and players include customers, sellers, products and services, infrastructure, front end, back end, and intermediaries.
Diff: 2 Page Ref: 52
3) Briefly discuss four mechanism aids for Web 2.0 tools.
Answer: Tags, folksonomy, mashups, and social bookmarks are four mechanism aids for Web 2.0 tools. A tag is a nonhierarchical key word or term assigned to a piece of information. Folksonomy is the practice and method of collaboratively creating, classifying, and managing tags to annotate and categorize content. Mashup refers to the combination of two or more websites into a single website that provides the content of both sites. Social bookmarking is a Web service for sharing Internet bookmarks.