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I. TRUE/ FALSE: Write TRUE if the statement is correct and FALSE if it is otherwise.
1.The Internet reduces transaction costs in value chains and offers an efficient means of communication to
anyone with an Internet connection.
2. Virtual communities began online after the Internet was in general use.
3. Most of the early Web community businesses are open and thriving today.
4. The general idea behind all of the social networking sites is that people are invited to join by existing
members who think they would be valuable additions to the community.
5. The 2008 U.S. elections saw the first major use of blogs as a political networking tool.
6. Any business that uses the Web becomes an international business instantly.
7. Businesses that operate on the Web must comply with the same laws and regulations that govern the
operations of all businesses.
8. In the physical world, geographic boundaries rarely coincide with legal and cultural boundaries.
9. The legal systems of most countries include a concept called constructive notice.
10. Physical boundaries are a convenient and effective way to announce the ending of one legal or cultural
system and the beginning of another.
11.Digital certificates never expire.
12. Message packets on the Internet travel a planned path from a source node to a destination node.
13. Any message traveling on the Internet is subject to secrecy, integrity, and necessity threats.
14. One significant threat to electronic commerce is theft of sensitive or personal information.
15. Secrecy protection is a legal matter.
16. Fewer than 5 percent of all credit card transactions are completed online, but those transactions are
responsible for about 50 percent of the total dollar amount of credit card fraud.
17. The front-end processor handles chargebacks and any other reconciliation items through the interchange
network and the acquiring and issuing banks, including the ACH transfers.
18. Many stores that accept credit cards require a minimum purchase amount of $50.
19. Small purchases are not profitable for merchants that accept only credit cards for payment.
20. Concerns about electronic payment methods include privacy and security, independence, portability, and
II. MULTIPLE CHOICE. Write the Letter of your answer on the answer sheet provided. Use
1.____ were computers that allowed users to connect through modems (using dial-up connections through
telephone lines) to read and post messages in a common area.
a. Electronic social systems
c. IRC systems
b. Bulletin chat systems
d. Bulletin board systems
2. A(n) ____ is a gathering place for people and businesses that does not have a physical existence.
a. meetup
c. lock-in community
b. online community
d. escrow service
3. A(n) ____ site is a Web site that allows individuals to create and publish a profile, create a list of other
users with whom they share a connection (or connections), control that list, and monitor similar lists made
by other users.
a. social commerce
c. social networking
b. electronic commerce
d. social medium

4. The trend toward having readers help write the online newspaper is called ____ journalism.
a. participatory
c. social
b. peer
d. collective
5. The earliest written records of auctions are from Babylon and date from ____ B.C.
a. 100
c. 2000
b. 500
d. 4000
6. The 18th century saw the birth of two British auction houses, ____ in 1744 and Christie's in 1766.
a. William's
c. Vickrey's
b. Sotheby's
d. Tiffany
7. A ____ is an intentional or negligent action taken by a legal entity that causes harm to another legal entity.
a. contract exception
c. crime
b. tort
d. deposition
8. ____ is a court's authority to decide a particular type of dispute.
a. Jurisdiction
c. Subject-matter jurisdiction
b. Personal jurisdiction
d. Notice
9. In the United States, federal courts have ____ over issues governed by federal law.
a. subject-matter jurisdiction
c. notice
b. personal jurisdiction
d. legitimacy
10. A ____ clause is a statement that the contract will be enforced according to the laws of a particular state.
a. forum selection
c. personal jurisdiction
b. jurisdiction
d. subject-matter jurisdiction
11. The details of ____ vary from state to state, but generally create personal jurisdiction over nonresidents
who transact business or commit tortious acts in the state.
a. subject-matter jurisdiction
c. statewide jurisdiction
b. long-arm statutes
d. forum selection
12. A(n) ____ is a program hidden inside another program or Web page that masks its true purpose.
a. mask program
c. hidden route
b. Trojan horse
d. insider program
13. Java is a programming language developed by ____.
a. Microsoft
c. Oracle
b. IBM
d. Sun Microsystems
14. A(n) ____ is an object that contains programs and properties that Web designers place on Web pages to
perform particular tasks.
a. objective
c. ActiveX control
b. Java++
d. plug-in
15. ActiveX controls run only on computers with ____ operating systems.
a. Windows
b. Linux
d. Mac

16. A(n) ____ is software that attaches itself to another program and can cause damage when the host
program is activated.
a. applet
c. virus
b. cookie
d. message digest
17. The term ____ describes the process of hiding information within another piece of information.
a. ACL
c. firewall
b. steganography
d. decryption
18. ____ is the protection of individual rights to nondisclosure.
a. Secrecy
c. Necessity
b. Privacy
d. Sensitivity
19. ____ digital wallets remain on a server and thus require no download time or installation on a users
a. Server-side
c. Paypal
b. Client-side
d. Virtual
20. A ____ is a stored-value card that is a plastic card with an embedded microchip that can store
a. credit card
c. charge card
b. debit card
d. smart card
21. The largest dollar volume of payments today are made using ____.
a. paper checks
c. credit cards
b. debit cards
d. Paypal
22. Banks have been working for years to develop technologies that will help them reduce the ____, which is
the delay that occurs between the time that a person writes a check and the time that check clears the
persons bank.
a. fluctuation
c. drift
b. interval
d. float
23. ____ is a technique for committing fraud against the customers of online businesses.
a. Due diligence
c. Phishing
b. Money laundering
d. Chargeback
24. ____ is a criminal act in which the perpetrator gathers personal information about a victim and then uses
that information to obtain credit.
a. Pharming
c. Due diligence
b. Identity theft
d. Money laundering
25. ____ is a key element in a phishing attack.
a. Pharming
b. Money laundering

c. Due diligence
d. Spam

III. Fill in the blanks.

1. With a(n) ____________________ card, a user can pay off the entire card balance or pay a minimum
amount each billing period.

2. Businesspeople often use the term ____________________ as a general term to describe all types of
plastic cards that consumers use to make purchases.
3. ___________________ cards give consumers a unique card number that is valid for one transaction only.
4. ____________________ security means having all security measures working together to prevent
unauthorized disclosure, destruction, or modification of assets.
5. ____________________ cookies exists until the Web client ends the connection.
6. ____________________ cookies remain on the client machine indefinitely.
7. Cookies can be placed on the client computer by the Web server site, in which case they are called
____________________ cookies.
8. A(n) ____________________ cookie originates from a Web site other than the site being visited.
9. A Web ____________________ is a tiny graphic that a third-party Web site places on another sites Web
10. An entity becomes liable for ____________________ infringement if it is capable of supervising the
infringing activity and obtains a financial benefit from the infringing activity.
11. A(n) ____________________ is an exclusive right granted by the government to an individual to make,
use, and sell an invention.
12. The ____________________ patent, which protects a specific set of procedures for conducting a
particular business activity, is quite controversial.
13. A(n) ____________________ is used to identify services provided.
14. A(n) ____________________ is a distinctive mark, device, motto, or implement that a company affixes
to the goods it produces for identification purposes.
15. The name or part of that name that a business uses to identify itself is called a(n)
16. A(n) ____________________ auction is often better for the seller because the bidder with the highest
private valuation will not let the bid drop much below that valuation for fear of losing the item to another
17. Dutch auctions are also called ____________________ auctions.
18. In 2004, Google used a(n) ____________________ auction to sell its stock to investors in its initial
public offering.
19. If multiple items are being auctioned in a(n) ____________________ sealed-bid auction, successive
lower (next highest) bidders are awarded the remaining items at the price they bid.
20. William Vickrey won the 1996 Nobel Prize in Economics for his studies of the properties of
____________________ sealed-bid auctions.
1. Give 5 significant lessons that you have learned in our subject and explain how you will be able to
apply this in your career in the future.

Our greatest glory is not in never falling, but in rising every time we fall.
Oliver Goldsmith

God Bless in your exams!