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File: ch06, Chapter 6: E-Business and E-Commerce

True/False

1. Electronic commerce is changing only the production and operations management functional area.
Ans: False
Response: See page 176

2. Electronic commerce is the buying and selling of products, services, and information via computer
networks, primarily the Internet.
Ans: True
Response: See page 179

3. Electronic business is a broader term than electronic commerce.


Ans: True
Response: See page 179

4. Electronic commerce can take several forms depending on the degree of digitization.
Ans: True
Response: See page 179

5. Electronic commerce can take only one form; i.e., digital.


Ans: False
Response: See page 179

6. In traditional commerce, the product or service, the process, and the delivery agent are physical.
Ans: True
Response: See page 179

7. In traditional commerce, one or more of the product or service, the process, and the delivery agent can be
digital.
Ans: False
Response: See page 179

8. In pure electronic commerce, the product or service, the process, and the delivery agent can be digital or
physical.
Ans: False
Response: See page 179

9. In partial electronic commerce, at least one of the product or service, the process, or the delivery agent is
digital.
Ans: True
Response: See page 179

10. Companies that are engaged only in electronic commerce are considered virtual (or pure-play)
organizations.
Ans: True
Response: See page 179

11. Companies that conduct some e-commerce activities, yet their primary business is done in the physical
world, are considered click-and-mortar organizations.
Ans: True
Response: See page 179

12. Buying a car at your local dealership is an example of pure electronic commerce.
Ans: False
Response: See page 180

13. Going to the Web site of a car manufacturer (e.g., www.gm.com), entering the specifications for the car
you want, and then picking up your car at your local dealership is an example of partial electronic
commerce.
Ans: True
Response: See page 180

14. Going to the Web site of a car manufacturer (e.g., www.gm.com), entering the specifications for the car
you want, and then picking up your car at your local dealership is an example of pure electronic commerce.
Ans: False
Response: See page 180

15. With business-to-consumer EC, the sellers are organizations and the buyers are individuals.
Ans: True
Response: See page 181

16. With business-to-business EC, the sellers and buyers are organizations.
Ans: True
Response: See page 181

17. With business-to-business EC, the sellers are organizations and the buyers are individuals.
Ans: False
Response: See page 181

18. With consumer-to-consumer EC, individuals sell products or services to other individuals.
Ans: True
Response: See page 181

19. eBay is a good example of consumer-to-consumer electronic commerce.


Ans: True
Response: See page 181

20. eBay is a good example of business-to-consumer electronic commerce.


Ans: False
Response: See page 181

21. Internet-based classified ads offer an international audience, which is an advantage over traditional
classified ads.
Ans: True
Response: See page 181

22. Internet-based classified ads increase the listings of goods and services.
Ans: True

Response: See page 181

23. Internet-based classified ads decrease the listings of goods and services.
Ans: False
Response: See page 181

24. Internet-based classified ads increase the number of potential buyers.


Ans: True
Response: See page 181

25. Internet-based classified ads decrease the number of potential buyers.


Ans: False
Response: See page 181

26. In business-to-employee electronic commerce, an organization uses EC internally to provide


information and services to its employees.
Ans: True
Response: See page 182

27. In business-to-consumer electronic commerce, an organization uses EC internally to provide


information and services to its employees.
Ans: False
Response: See page 182

28. An example of government-to-citizen electronic commerce is the direct deposit of Social Security and
pension payments.
Ans: True
Response: See page 182

29. Electronic benefits transfer is a type of B2B electronic commerce.


Ans: False
Response: See page 182

30. When electronic commerce is done in a wireless environment, it is called mobile commerce.
Ans: True
Response: See page 182

31. The primary characteristic of auctions is that prices are determined dynamically by competitive bidding.
Ans: True
Response: See page 182

32. The primary characteristic of auctions is that prices are static during the bidding process.
Ans: False
Response: See page 182

33. Forward auctions are used mainly as a selling channel.


Ans: True
Response: See page 182

34. In reverse auctions, there is one buyer who wants to buy a product or a service. Suppliers are invited to
submit bids and the supplier with the lowest bid wins.
Ans: True
Response: See page 182

35. The reverse auction is the most common auction model for large purchases.
Ans: True
Response: See page 182

36. The forward auction is the most common auction model for large purchases.
Ans: False
Response: See page 182

37. eBay uses a forward auction process.


Ans: True
Response: See page 182

38. eBay uses a reverse auction process.


Ans: False
Response: See page 182

39. An electronic marketplace is a central, virtual market space on the Web where many buyers and many
sellers can conduct electronic business activities.
Ans: True
Response: See page 184

40. An electronic marketplace is a central, physical marketplace where many buyers and many sellers can
conduct electronic business activities.
Ans: False
Response: See page 184

41. Electronic commerce makes national and international markets more accessible.
Ans: True
Response: See page 184

42. Electronic commerce makes national and international markets less accessible.
Ans: False
Response: See page 184

43. Electronic commerce increases the costs of processing, distributing, and retrieving information.
Ans: True
Response: See page 184

44. Electronic commerce decreases the costs of processing, distributing, and retrieving information.
Ans: False
Response: See page 184

45. Electronic commerce provides the ability to easily and conveniently deliver information, services, and
products to people in cities, rural areas, and developing countries.
Ans: True

Response: See page 184

46. Electronic commerce provides the ability to easily and conveniently deliver information, services, and
products to people in cities, but unfortunately not rural areas or developing countries.
Ans: False
Response: See page 184

47. There are universally accepted standards for quality, security, and reliability of electronic commerce
transactions.
Ans: False
Response: See page 184

48. There is a lack of universally accepted standards for quality, security, and reliability of electronic
commerce transactions.
Ans: True
Response: See page 184

49. Even though B2B EC is much larger by volume, B2C EC is more complex.
Ans: True
Response: See page 184

50. Even though B2C EC is much larger by volume, B2B is more complex.
Ans: False
Response: See page 184

51. B2C involves a large number of buyers making millions of diverse transactions per day with a relatively
small number of sellers.
Ans: True
Response: See page 184

52. B2B involves a large number of buyers making millions of diverse transactions per day with a relatively
small number of sellers.
Ans: False
Response: See page 184

53. The vast majority of electronic commerce volume is business-to-consumer.


Ans: False
Response: See page 184

54. Electronic retailing (e-tailing) is the direct sale of products and services through electronic storefronts
or electronic malls, usually designed around an electronic catalog and/or auctions.
Ans: True
Response: See pages 184-185

55. An electronic storefront is a Web site on the Internet representing a single store.
Ans: True
Response: See page 185

56. An electronic mall is a Web site on the Internet representing a single store.
Ans: False
Response: See page185

57. An electronic storefront is a collection of individual shops under a single Internet address.
Ans: False
Response: See page 185

58. All electronic storefronts are extensions of physical stores.


Ans: False
Response: See page 185

59. An electronic mall is a collection of individual shops under a single Internet address.
Ans: True
Response: See page185

60. Electronic wholesaling is the direct sale, businesses to consumers, through electronic storefronts or
malls, usually designed around an electronic catalog.
Ans: False

Response: See page 184-185

61. Solo storefronts maintain their own Internet names and Web sites and may be extensions of physical
stores.
Ans: True
Response: See page 185

62. Solo storefronts are always affiliated with electronic malls.


Ans: False
Response: See page 185

63. You can make a purchase in a referral mall.


Ans: False
Response: See page 186

64. Selling products on the Internet may reduce vendors selling costs by 20 to 40 percent, and further
reductions are easily possible.
Ans: False
Response: See page 186

65. Selling products such as books and computers on the Internet may reduce vendors selling costs by 20
to 40 percent, with further reductions being difficult because the products must be delivered physically.
Ans: True
Response: See page 186

66. Selling products on the Internet may reduce vendors selling costs by 20 to 40 percent, with further
reductions being difficult due to the high cost of hardware and software necessary to run the Web site.
Ans: False
Response: See page 186

67. The cost per transaction of cyberbanking is far less than the cost per transaction at a physical bank
branch.
Ans: True
Response: See page 186

68. Virtual banks are those banks dedicated only to Internet transactions.
Ans: True
Response: See page 186

69. The Internet is ineffective for job seekers and for companies searching for employees.
Ans: False
Response: See page 187

70. The Internet is effective for job seekers and for companies searching for employees.
Ans: True
Response: See page 187

71. Electronic commerce is not well-suited for the real estate industry.
Ans: False
Response: See page 187

72. Really simple syndication allows you to put together a list of Web sites that you want to follow.
Ans: True
Response: See page 188

73. Multichanneling allows you to put together a list of Web sites that you want to follow.
Ans: False
Response: See page 188

74. Channel conflict occurs when click-and-mortar companies have problems with their regular distributors
when they sell directly to customers online.
Ans: True
Response: See page 188

75. Multichanneling occurs when companies integrate their online and offline channels.
Ans: True
Response: See page 188

76. Multichanneling occurs when companies use only their online channels.
Ans: False
Response: See page 188

77. When an established company decides to sell direct online, it may create a conflict within its existing
operation.
Ans: True
Response: See page 188

78. E-tailers have few conflicts with order fulfillment, because they are shipping large quantities of
products to few buyers.
Ans: False
Response: See page 188

79. Order fulfillment includes only providing customers with what they ordered in a timely fashion.
Ans: False
Response: See page 188

80. Order fulfillment includes providing customers with what they ordered in a timely manner, as well as
all aspects of customer service.
Ans: True
Response: See page 188

81. Traditional advertisement on TV or newspaper is impersonal, one-way mass communication.


Ans: True
Response: See page 188

82. Traditional advertisement on TV or newspaper is personalized, one-to-one communication.


Ans: False
Response: See page 188

83. Internet advertising is media-rich, dynamic, and interactive.

Ans: True
Response: See page 190

84. Internet advertising is impersonal, one-way mass communication.


Ans: False
Response: See page 190

85. Internet ads can be updated any time at minimal cost.


Ans: True
Response: See page 190

86. Print ads can be updated at any time at minimal cost.


Ans: False
Response: See page 190

87. Internet ads can be interactive and targeted to specific groups and/or individuals.
Ans: True
Response: See page 190

88. Print ads are interactive and targeted to specific groups and/or individuals.
Ans: False
Response: See page 190

89. Banners are the most common form of advertisement on the Internet.
Ans: True
Response: See page 190

90. Electronic mail is the most common form of advertisement on the Internet.
Ans: False
Response: See page 190

91. Banners can be customized to a target audience.

Ans: True
Response: See page 190

92. Banners cannot be customized to a target audience.


Ans: False
Response: See page 190

93. Many people ignore banner advertising today.


Ans: True
Response: See page 190

94. A pop-up ad is automatically launched by some trigger and appears in front of the active window.
Ans: True
Response: See page 190

95. A pop-under ad is automatically launched by some trigger and appears behind the active window.
Ans: True
Response: See page 190

96. A pop-under ad is automatically launched by some trigger and appears in front of the active window.
Ans: False
Response: See page 190

97. A pop-up ad is automatically launched by some trigger and appears behind the active window.
Ans: False
Response: See page 190

98. E-mail provides a better and quicker response rate than print ads.
Ans: True
Response: See page 190

99. Print ads provide a better and quicker response rate than e-mail.

Ans: False
Response: See page 190

100. Spamming is the indiscriminate distribution of electronic ads without permission of the receiver.
Ans: True
Response: See page 191

101. Hacking is the indiscriminate distribution of electronic ads without permission of the receiver.
Ans: False
Response: See page 191

102. Permission marketing asks consumers to give their permission to voluntarily accept online advertising
and e-mail.
Ans: True
Response: See page 191

103. Permission marketing refers to online word-of-mouth marketing.


Ans: False
Response: See page 191

104. Viral marketing asks consumers to give their permission to voluntarily accept online advertising and email.
Ans: False
Response: See page 191

105. Business-to-consumer applications comprise the majority of electronic commerce volume.


Ans: False
Response: See page 192

106. Business-to-business applications comprise the majority of electronic commerce volume.


Ans: True
Response: See page 192

107. In the sell-side marketplace, organizations attempt to sell their products and services to other
organizations electronically.
Ans: True
Response: See page 192

108. In the buy-side marketplace, organizations attempt to sell their products and services to other
organizations electronically.
Ans: False
Response: See page 192

109. The key mechanisms in the sell-side marketplace are customized electronic catalogs and forward
auctions.
Ans: True
Response: See page 192

110. The key mechanisms in the sell-side marketplace are customized electronic catalogs and reverse
auctions.
Ans: False
Response: See page 192

111. The sell-side marketplace is similar to the business-to-consumer model.


Ans: True
Response: See page 192

112. In the sell-side marketplace, electronic commerce technology is used to reduce both the cost of items
purchased and the administrative cost of procurement.
Ans: False
Response: See page 193

113. The buy-side marketplace is similar to the business-to-consumer model.


Ans: False
Response: See page 193

114. The buy-side marketplace reduces the purchasing cycle time.

Ans: True
Response: See page 193

115. The sell-side marketplace reduces the purchasing cycle time.


Ans: False
Response: See page 193

116. The key mechanism of the buy-side marketplace is the electronic catalog.
Ans: False
Response: See page 193

117. Electronic exchanges refer to e-marketplaces where there are many sellers and few buyers.
Ans: False
Response: See page 193

118. Vertical exchanges connect buyers and sellers in a given industry.


Ans: True
Response: See page 193

119. Horizontal exchanges connect buyers and sellers in a given industry.


Ans: False
Response: See page 193

120. Horizontal exchanges connect buyers and sellers across many industries.
Ans: True
Response: See page 193

121. Vertical exchanges connect buyers and sellers across many industries.
Ans: False
Response: See page 193

122. Vertical exchanges are used mainly for maintenance, operations, and repair (MRO) materials.

Ans: False
Response: See page 193

123. Horizontal exchanges are used mainly for maintenance, operations, and repair (MRO) materials.
Ans: True
Response: See page 193

124. In functional exchanges, needed services such as temporary help are traded on an as-needed basis.
Ans: True
Response: See page 193

125. With horizontal distributors, needed services such as temporary help are traded on an as-needed basis.
Ans: False
Response: See page 193

126. Where B2B exchanges are used mainly to facilitate trading among companies, electronic hubs are
used to facilitate communications and coordination among business partners in a supply chain.
Ans: True
Response: See page 194

127. Where electronic hubs are used mainly to facilitate trading among companies, B2B exchanges are
used to facilitate communications and coordination among business partners in a supply chain.
Ans: False
Response: See page 194

128. In most cases, traditional payment systems are effective for electronic commerce.
Ans: False
Response: See page 194

129. In most cases, traditional payment systems are not effective for electronic commerce.
Ans: True
Response: See page 194

130. Cash cannot be used in electronic commerce because there is no face-to-face contact.
Ans: True
Response: See page 194

131. Cash can be used in electronic commerce even though there is no face-to-face contact.
Ans: False
Response: See page 194

132. It is more secure for a buyer to use the telephone or mail to arrange or send payment, than to finish the
transaction on a computer.
Ans: False
Response: See page 194

133. Electronic checks are used mostly in B2B electronic commerce.


Ans: True
Response: See page 194

134. Electronic checks are used mostly in C2C electronic commerce.


Ans: False
Response: See page 194

135. Purchasing cards are the B2B equivalent of electronic credit cards.
Ans: True
Response: See page 196

136. Stored-value money cards are a form of e-cash.


Ans: True
Response: See page 197

137. Stored-value money cards and smart cards are the same thing.
Ans: False
Response: See page 197

138. Smart cards are frequently multipurpose.


Ans: True
Response: See page 197

139. Smart cards can be used as credit cards, debit cards, and/or loyalty cards.
Ans: True
Response: See page 197

140. Stored-value money cards can be used as credit cards, debit cards, and/or loyalty cards.
Ans: False
Response: See page 197

141. Person-to-person payments allow two individuals to transfer funds with a credit card.
Ans: False
Response: See page 198

142. Digital wallets are software mechanisms that provide security measures, combined with convenience,
to electronic commerce purchasing.
Ans: True
Response: See page 199

143. You need an e-wallet with each merchant.


Ans: True
Response: See page 199

144. Each buyer needs only one e-wallet for all merchants.
Ans: False
Response: See page 199

145. Internet fraud is increasing rapidly.


Ans: True
Response: See page 200

146. Cybersquatting refers to the practice of registering domain names in order to sell them later at a higher
price.
Ans: True
Response: See page 201

Multiple Choice

1. The nature of business competition is changing drastically as a result of which of the following?
a) new online companies
b) new business models
c) the diversity of EC-related products and services
d) all of the above
Ans: d
Response: See page 176

2. Electronic business includes which of the following?


a) buying and selling
b) servicing customers
c) collaborating with business partners
d) conducting electronic transactions within an organization
e) all of the above
Ans: e
Response: See page 179

3. The degree of digitization does not relate to which of the following?


a) the product or service sold
b) the process
c) the intermediary
d) the number of e-commerce transactions
e) none of the above
Ans: d
Response: See page 179

4. In this type of e-commerce, the sellers and buyers are organizations.


a) government-to-citizen
b) consumer-to-consumer
c) business-to-business
d) business-to-consumer
e) none of the above

Ans: c
Response: See page 181

5. In this type of e-commerce, buyers and sellers are individuals.


a) government-to-citizen
b) consumer-to-consumer
c) consumer-to-business
d) business-to-consumer
e) none of the above
Ans: b
Response: See page 181

6. eBay is an example of which type of e-commerce?


a) government-to-citizen
b) consumer-to-consumer
c) consumer-to-business
d) business-to-consumer
e) none of the above
Ans: b
Response: See page 181

7. In this type of e-commerce, an organization provides information and services to its workers.
a) business-to-employee
b) consumer-to-consumer
c) consumer-to-business
d) business-to-consumer
e) none of the above
Ans: a
Response: See page 182

8. Direct payment of Social Security benefits is an example of which type of e-commerce?


a) government-to-citizen
b) consumer-to-consumer
c) consumer-to-business
d) business-to-consumer
e) none of the above
Ans: a
Response: See page 182

9. If you are an employee managing your fringe benefits over your companys intranet, you are engaging in
which of the following?

a) business-to-business
b) business-to-consumer
c) consumer-to-consumer
d) business-to-employee
e) government-to-citizen
Ans: d
Response: See page 182

10. When e-commerce is done in a wireless environment, this is called:


a) pervasive computing
b) wireless commerce
c) location commerce
d) consumer commerce
e) mobile commerce
Ans: e
Response: See page 182

11. In _____ auctions, a single seller auctions item(s) to many potential buyers.
a) forward
b) reverse
c) static
d) physical
e) none of the above
Ans: a
Response: See page 182

12. In _____ auctions, there is one buyer who wants to buy a product. Suppliers submit bids and the lowest
bid wins.
a) forward
b) static
c) reverse
d) physical
e) none of the above
Ans: b
Response: See page 182

13. eBay uses a _____ auction.


a) forward
b) static
c) reverse
d) physical
e) none of the above
Ans: a

Response: See page 182

14. _____ auctions employ a request for quotation.


a) forward
b) static
c) reverse
d) physical
e) none of the above
Ans: c
Response: See page 182

15. _____ auctions are the most common auction model for large purchases.
a) forward
b) static
c) reverse
d) physical
e) none of the above
Ans: c
Response: See page 182

16. Manufacturers or retailers sell directly to customers in which of the following business models?
a) find-the-best-price
b) electronic tendering system
c) name-your-own-price
d) online direct marketing
e) affiliate marketing
Ans: d
Response: See page 183

17. In which of the following business models do businesses request quotes from suppliers and use B2B
with a reverse auction mechanism?
a) find-the-best-price
b) electronic tendering system
c) name-your-own-price
d) online direct marketing
e) affiliate marketing
Ans: b
Response: See page 183

18. Vendors ask partners to place logos or banners on partners site. If customers click on logo, go to
vendors site and buy, then vendor pays commissions to partners. This is which business model?
a) find-the-best-price

b) electronic tendering system


c) name-your-own-price
d) online direct marketing
e) affiliate marketing
Ans: e
Response: See page 183

19. In which business model do receivers send information about your product to their friends?
a) find-the-best-price
b) electronic tendering system
c) name-your-own-price
d) viral marketing
e) affiliate marketing
Ans: d
Response: See page 183

20. Which type of electronic commerce is the largest by volume?


a) business-to-employee
b) consumer-to-consumer
c) business-to-business
d) business-to-consumer
e) none of the above
Ans: c
Response: See page 184

21. Which type of electronic commerce does Amazon practice?


a) business-to-employee
b) consumer-to-consumer
c) consumer- to-business
d) business-to-consumer
e) none of the above
Ans: d
Response: See page 182

22. This type of e-commerce is known as e-tailing.


a) business-to-business
b) collaborative commerce
c) intrabusiness
d) business-to-consumer
e) consumer-to-business
Ans: d
Response: See page 184

23. _____ is not an electronic commerce application?


a) home banking
b) buying stocks
c) evaluating an employee
d) conducting an auction
e) buying real estate
Ans: c
Response: See pages 184-188

24. Which of the following are advantages of e-tailing?


a) you can buy from home, 24 hours per day
b) you have a wide variety of products and services
c) you can obtain detailed information on products
d) you can compare competitors products and prices
e) all of the above
Ans: e
Response: See page 185

25. Which of the following is not an advantage of e-tailing?


a) you can buy from home, 24 hours per day
b) you have just a few products to choose from
c) you can obtain detailed information on products
d) you can compare competitors products and prices
e) all of the above
Ans: b
Response: See page 185

26. Which of the following is not an advantage of e-tailing?


a) you can buy from home, 24 hours per day
b) you have a wide variety of products and services
c) you can obtain limited information on products
d) you can compare competitors products and prices
e) all of the above
Ans: c
Response: See page 185

27. Cyberbanking offers which of the following advantages?


a) convenient for customers
b) saves time for customers
c) inexpensive transactions for the bank
d) chance of recruiting remote customers
e) all of the above

Ans: e
Response: See page 184

28. Cyberbanking offers all of the following advantages except:


a) convenient for customers
b) saves time for customers
c) inexpensive transactions for the bank
d) chance of recruiting remote customers
e) more expensive for the customer
Ans: e
Response: See page 184

29. Online securities trading offers which of the following advantages?


a) transactions are cheaper
b) saves time
c) minimizes mistakes
d) increases available information
e) all of the above
Ans: e
Response: See page 185

30. Which of the following is not an advantage of online securities trading?


a) transactions are cheaper
b) saves time
c) minimizes mistakes
d) decreases available information
e) none of the above
Ans: d
Response: See page 185

31. When Ford Motor Company decided to avoid direct online sales, the company was trying to eliminate
which of the following?
a) federal sales taxes
b) customer irritation
c) channel conflict
d) channel integration
e) state sales taxes
Ans: c
Response: See page 186

32. Difficulties in order fulfillment are most closely associated with which of the following?

a) business-to-business EC
b) business-to-consumer EC
c) government-to-citizen EC
d) business-to-employee EC
e) mobile commerce
Ans: b
Response: See page 186

33. Internet advertising improves on traditional advertising in all of the following ways except:
a) Internet ads can be updated at any time at minimal cost
b) Internet ads can reach large numbers of potential buyers all over the world
c) Internet ads are always more effective
d) Internet ads can make effective use of multimedia
e) Internet ads are current
Ans: c
Response: See page 188

34. A _____ is automatically launched by some trigger and appears in front of the active window.
a) keyword banner
b) random banner
c) pop-up ad
d) pop-under ad
e) text box
Ans: c
Response: See page 190

35. A_____ is automatically launched by some trigger and appears behind the active window.
a) keyword banner
b) random banner
c) pop-up ad
d) pop-under ad
e) text box
Ans: d
Response: See page 190

36. _____ offers consumers incentives to accept advertising and e-mail voluntarily.
a) viral marketing
b) personalized marketing
c) permission marketing
d) paper catalogs
e) direct mail
Ans: c
Response: See page 189

37. _____ refers to online word-of-mouth marketing.


a) permission marketing
b) one-to-one marketing
c) personalized marketing
d) viral marketing
e) direct mail
Ans: d
Response: See page 189-90

38. In the _____ marketplace model, organizations attempt to sell their products or services to other
organizations electronically.
a) buy-side
b) sell-side
c) group purchasing
d) desktop purchasing
e) electronic exchange
Ans: b
Response: See page 190

39. The key mechanisms of the _____ marketplace model are electronic catalogs that can be customized for
each large buyer and forward auctions.
a) buy-side
b) sell-side
c) group purchasing
d) desktop purchasing
e) electronic exchange
Ans: b
Response: See page 190

40. In the _____ marketplace model, EC technology is used to streamline the purchasing process in order to
reduce the cost of items purchased, the administrative cost of procurement, and purchasing cycle time.
a) buy-side
b) sell-side
c) auctions
d) group purchasing
e) electronic exchange
Ans: a
Response: See page 191

41. In the _____ marketplace model, the reverse auction is typically used.
a) buy-side

b) sell-side
c) group purchasing
d) desktop purchasing
e) electronic exchange
Ans: a
Response: See page 191

42. In the _____ B2B application, the orders of many buyers are aggregated so that they total to a large
volume, in order to merit more seller attention.
a) buy-side
b) sell-side
c) auctions
d) group purchasing
e) electronic exchange
Ans: d
Response: See page 191

43. In _____, direct and indirect materials in one industry are purchased on an as-needed basis.
a) horizontal exchanges
b) vertical exchanges
c) buy-side marketplaces
d) functional exchanges
e) none of the above
Ans: b
Response: See page 191

44. _____ connect buyers and sellers across many industries and are used mainly for indirect materials.
a) horizontal exchanges
b) vertical exchanges
c) buy-side marketplaces
d) functional exchanges
e) none of the above
Ans: a
Response: See page 191

45. In _____, needed services such as temporary help or extra space are traded on an as-needed basis.
a) horizontal exchanges
b) vertical exchanges
c) buy-side marketplaces
d) functional exchanges
e) none of the above
Ans: d
Response: See page 191

46. _____ are used to facilitate trading among companies in a supply chain.
a) horizontal exchanges
b) vertical exchanges
c) buy-side marketplaces
d) functional exchanges
e) electronic hubs
Ans: e
Response: See page 192

47. Nonelectronic payment methods have which of the following limitations in electronic commerce?
a) cash cannot be used because there is no face-to-face contact
b) takes time for payment in the mail
c) not all organizations accept credit cards
d) it is less secure for the buyer to use the telephone than to complete a secure transaction on a computer
e) all of the above
Ans: e
Response: See page 192

48. Which of the following is not a limitation of nonelectronic payment methods in electronic commerce?
a) cash cannot be used because there is no face-to-face contact
b) takes time for payment in the mail
c) not all organizations accept credit cards
d) it is more secure for the buyer to use the telephone than to complete a secure transaction on a computer
e) all of the above
Ans: d
Response: See page 192

49. _____ are a payment mechanism similar to regular bank checks but transmitted electronically, with a
signature in digital form.
a) electronic checks
b) electronic credit cards
c) electronic cash
d) electronic wallet
e) electronic debit cards
Ans: a
Response: See page 192

50. _____ use credit card numbers, transmitted electronically over the Internet, to pay for goods and
services and are unencrypted or encrypted, with coded data readable by an intermediary between the
buyers and sellers banks.
a) electronic checks

b) electronic credit cards


c) electronic cash
d) electronic wallet
e) electronic debit cards
Ans: b
Response: See page 192

51. _____ are typically used for unplanned B2B purchases for amounts under $2000.
a) electronic checks
b) stored-value money cards
c) purchasing cards
d) smart cards
e) person-to-person payments
Ans: c
Response: See page 194

52. A form of e-cash, _____ allow you to store a fixed amount of prepaid money and then spend it as
necessary.
a) electronic checks
b) stored-value money cards
c) purchasing cards
d) smart cards
e) person-to-person payments
Ans: b
Response: See page 195

53. _____ contain a chip that can store information and can be used for several purposes.
a) electronic checks
b) stored-value money cards
c) purchasing cards
d) smart cards
e) person-to-person payments
Ans: d
Response: See page 195

54. _____ enable two individuals to transfer funds without using a credit card.
a) electronic checks
b) stored-value money cards
c) purchasing cards
d) smart cards
e) person-to-person payments
Ans: e
Response: See page 196

55. _____ are software mechanisms that provide security measures and convenience for electronic
commerce purchasing.
a) electronic checks
b) digital wallets
c) purchasing cards
d) smart cards
e) person-to-person payments
Ans: b
Response: See page 197

Short Answer
1. Differentiate between pure and partial electronic commerce. Give examples of companies in each
category.
Response: See page 177-178

2. Discuss the various types of electronic commerce.


Response: See pages 179-180

3. Differentiate between forward and reverse auctions.


Response: See page 180

4. Discuss the following electronic commerce business models and give examples of each type: online
direct marketing, electronic tendering system, name-your-own-price, find-the-best-price, affiliate
marketing, and viral marketing.
Response: See page 181

5. Differentiate between electronic storefronts and electronic malls and give examples of each.
Response: See pages 181-182

6. Discuss the benefits and limitations of electronic commerce.


Response: See page 183

7. Discuss the various business-to-consumer applications (e.g., e-tailing, electronic storefronts, electronic
malls).
Response: See pages 182-186

8. Discuss the various methods of online advertising.


Response: See pages 188-190

9. Differentiate between sell-side marketplaces, buy-side marketplaces, and electronic exchanges.


Response: See pages 190-192

10. Describe the various types of electronic payments.


Response: See pages 192-197