Test Bank For E-Commerce 2023 Business, Technology, Society, 17th edition Kenneth C. Laudon, Carol G by StudyGuide

Test Bank For E-Commerce 2023 Business, Technology, Society, 17th edition Kenneth C. Laudon, Carol Guercio Traver Chapter 1-12 Chapter 1

The Revolution Is Just Beginning

1) Analysts estimate that by 2026, consumers will be spending around ________ in digital transactions. A) $170 million B) $1.7 billion C) $170 billion D) $1.7 trillion Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.1: Understand why it is important to study e-commerce. 2) It is likely that e-commerce will eventually impact nearly all commerce. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.1: Understand why it is important to study e-commerce. 3) Why study e-commerce? Answer: It is important to study e-commerce in order to be able to perceive and understand the opportunities and risks that lie ahead. E-commerce is a disruptive innovation that is different and more powerful than any of the other technologies we have seen in the past century. E-commerce technologies–and the digital markets that result–have brought about some fundamental, unprecedented shifts in commerce. While other technologies transformed economic life in the twentieth century, the evolving Internet and other information technologies are shaping the twenty-first century. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 1.1: Understand why it is important to study e-commerce. 4) Which of the following best defines e-commerce? A) digitally enabled commercial transactions between and among organizations and individuals B) the use of digital technologies in a firm's daily activities C) the digital enablement of transactions and processes within an organization D) any digital activity involving information systems under a firm's control Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and 1 Copyright © 2024 Pearson Education, Inc.

recognize major current themes in e-commerce. 5) Which of the following is an example of e-business? A) Amazon's inventory control system B) the Amazon.com website C) an Amazon mobile app D) Amazon's Facebook page Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 6) Which of the following can be considered synonymous with the term e-commerce? A) e-business B) digital commerce C) the Internet D) the Web Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 7) Which of the following is not true about the use of apps? A) The number of downloads from Google's Google Play store exceeds the number of downloads from Apple's App Store. B) Users still spend more time using mobile browsers than they do using mobile apps. C) Apps cannot be crawled by Google's search engine. D) Users typically use more than 45 different apps per month. Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 8) All of the following statements about e-commerce in the United States in 2021 are true except: A) Social e-commerce generated more revenue than mobile e-commerce. B) Mobile advertising accounted for more than two-thirds of all digital advertising spending. C) On-demand service firms fueled the growth of local e-commerce. D) Growth rates for retail e-commerce and m-commerce were around 10%. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from 2 Copyright © 2024 Pearson Education, Inc.

e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 9) In 2022, about ________ of Internet users in the United States accessed the Internet solely using a mobile device. A) 7% B) 20% C) 25% D) 73% Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 10) Which of the following is not a major business trend in e-commerce in 2022-2023? A) The mobile app ecosystem continues to grow. B) Retail e-commerce revenues exceed B2B e-commerce revenues for the first time. C) Content created and distributed by creators is becoming more and more prevalent. D) Social e-commerce continues to grow. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 11) Which of the following is not a major technology trend in e-commerce in 2022-2023? A) Cloud computing enables content stored on Internet-based servers to be accessed by consumer devices such as smartphones. B) Firms are turning to business analytics to make sense out of big data. C) Blockchain attracts increasing interest. D) Growth of the Internet of Things slows down. Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 12) Which of the following has not been the subject of concern about its increasing market dominance in 2022-2023? A) Amazon B) Google C) Netflix D) Meta Answer: C 3 Copyright © 2024 Pearson Education, Inc.

Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 13) Which of the following statements about the mobile platform is not true? A) In 2022, about 93% of Internet users in the United States used a mobile device to access the Internet at least some of the time. B) Almost 250 million individuals in the United States used tablet computer apps in 2022. C) Retail m-commerce purchases were expected to reach about $415 billion in 2022. D) U.S. adults spend an average of four-and-a-half hours per day using mobile devices. Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 14) Which of the following statements about the Web is not true? A) The Web is the technology upon which the Internet is based. B) The Web was the app that made the Internet commercially interesting and extraordinarily popular. C) The Web provides access to pages written in Hypertext Markup Language. D) The Web is both a communications infrastructure and an information storage system. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 15) Today, in the United States, more than ________ people of all ages use the Internet at least once a month. A) 3 million B) 30 million C) 300 million D) 3 billion Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 16) Which of the following statements about the Internet is not true? A) The Internet is a worldwide network of computer networks built on common standards. 4 Copyright © 2024 Pearson Education, Inc.

B) The Internet was created in the early 1990s. C) The Internet has shown extraordinary growth patterns when compared to other electronic technologies of the past. D) It is impossible to say with certainty exactly how many computers and other mobile devices are connected to the Internet worldwide at any time. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 17) The term e-commerce refers to the digital enabling of business processes both inside and outside the firm. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 18) E-commerce and e-business systems blur together at the business firm boundary, where internal business systems link up with suppliers or customers. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 19) The Internet has shown growth patterns that are similar to other electronic technologies of the past. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 20) What is the key factor in determining if a transaction is "commerce"? Answer: The key factor in determining if a transaction is commerce is the "exchange of value" (e.g., money) across organizational or individual boundaries in return for products and services. Difficulty: Easy AACSB: Analytical thinking; Written and oral communication Learning Objective: 1.2: Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce. 5 Copyright © 2024 Pearson Education, Inc.

21) Which of the following is not a unique feature of e-commerce technology? A) interactivity B) social technology C) information asymmetry D) richness Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 22) Which of the following features of e-commerce technology enables merchants to market and sell "complex" goods and services to consumers via marketing messages that can integrate video, audio, and text? A) richness B) ubiquity C) information density D) personalization Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 23) Which of the following features of e-commerce technology allows users to participate in the creation of online content? A) ubiquity B) global reach C) information density D) social technology Answer: D Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 24) Which of the following is the best definition of transaction costs? A) the expense of changing national or regional prices B) the costs of participating in a market C) the costs of finding suitable products in the market D) the costs merchants pay to bring their goods to market Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 6 Copyright © 2024 Pearson Education, Inc.

25) The world's online population was estimated to be more than ________ in 2022. A) 450 million B) 4.5 billion C) 45 billion D) 450 billion Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 26) Which of the following features of e-commerce technology is related to the concept of network externalities? A) richness B) interactivity C) universal standards D) information density Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 27) Which of the following statements is true about the traditional tradeoff between the richness and reach of a marketing message prior to the development of the Web? A) Marketing messages had little richness. B) The smaller the audience reached, the less rich the message. C) The larger the audience reached, the less rich the message. D) Richness was unrelated to reach. Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 28) Interactivity in the context of e-commerce provides which of the following functionalities? A) the ability to physically touch and manipulate a product B) the complexity and content of a message C) the ability of consumers to create and distribute content D) the enabling of two-way communication between consumer and merchant Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 29) The costs incurred by merchants to change product prices are referred to as: 7 Copyright © 2024 Pearson Education, Inc.

A) subscription costs. B) fixed costs. C) menu costs. D) variable costs. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance.

30) Which of the following refers to any disparity in relevant market information among parties in a transaction? A) information asymmetry B) unfair competitive advantage C) imperfect competition D) dynamic pricing Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 31) Which of the following is a physical place you visit in order to transact? A) marketspace B) marketplace C) social network D) the Internet Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 32) ________ represents the total number of users or customers an e-commerce business can obtain. A) Ubiquity B) Interactivity C) Reach D) Information density Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance.

33) Which of the following refers to the complexity and content of a message? A) richness B) reach C) information density D) interactivity Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 34) E-commerce is available just about everywhere and anytime. This is known as: A) richness. B) information density. C) ubiquity. D) reach. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 35) Ubiquity increases the cognitive energy required to transact in a marketspace. Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 36) Universal standards make price discovery more costly, slower, and less accurate. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 37) Price transparency refers to the ease with which consumers can find out what merchants pay for products. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance.

38) Personalization involves targeting marketing messages to specific individuals by adjusting the message based upon a consumer's preferences or past purchasing behavior. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 39) E-commerce technologies provide a unique, many-to-many model of mass communication. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 40) Identify the eight unique features of e-commerce technology and explain how these features set e-commerce apart from more traditional ways of conducting commercial transactions. Answer: The eight unique features of e-commerce technology are ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, and social technology. The fact that e-commerce is available nearly everywhere, at any time, (ubiquity) extends the marketplace beyond traditional boundaries and removes it from a temporal and geographic location. A marketspace is created in which shopping can take place anywhere, enhancing consumer convenience and reducing shopping costs, whereas in traditional commerce the marketplace is a physical place you must visit in order to transact. The global reach of e-commerce means that commerce is enabled across national and cultural boundaries as never before, with potentially billions of consumers and millions of businesses worldwide included in the marketspace. Traditional commerce, by contrast, is local or regional involving local merchants or national merchants with local outlets. Universal standards (one set of technical media standards) also allow for the seamless enablement of global commerce. In contrast, most traditional commerce technologies differ from one nation to the next. In traditional markets, national sales forces and small retail stores can provide a complex and content-rich message. However, there is generally a trade-off between the richness of the message and the number of consumers who can be reached with the marketing message. In e-commerce the trade-off is no longer necessary. An information rich environment is extended globally. Unlike any other commercial technology of the twentieth century, except perhaps the telephone, e-commerce technologies are interactive, allowing for two-way communication between the seller and the consumer. E-commerce technologies reduce information collection, storage, processing, and communication costs, thereby greatly increasing the prevalence, accuracy, and timeliness of information. This information density (information that is more plentiful, cheaper, and of higher quality) sets e-commerce apart from all other traditional methods of conducting transactions. E-commerce technologies also permit the personalization and customization of marketing messages on a level that was impossible with previous commerce technologies. Marketing messages can be targeted to specific individuals based on their interests and past purchasing behavior, and the product or service can be altered to suit a customer's preferences and prior 10 Copyright © 2024 Pearson Education, Inc.

behavior. Social technology allows users to easily generate and share content and permits a many-to-many model of mass communications that is different from previous technologies. This supports the creation of new business models and products that support social network services. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 1.3: Identify and descry ibe the unique features of e-commerce technology and discuss their business significance. 41) How has e-commerce changed the marketing of goods? Answer: E-commerce has greatly changed the marketing of goods. Before e-commerce was developed, the marketing and sale of goods was a mass-marketing and sales force-driven process. Marketers viewed consumers as passive targets of advertising campaigns. E-commerce has brought many new possibilities for marketing. The Internet and Web can deliver rich marketing messages with text, video, and audio to an audience of millions in a way not possible with traditional commerce technologies such as radio, television, or magazines. Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. In addition, much information about the consumer can be gathered from the website the consumer visits. With the increase in information density, a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. The result is a level of personalization and customization unthinkable with existing commerce technologies. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 42) What are some examples of the way interactivity allows online merchants to engage a consumer in ways similar to a face-to-face experience? Answer: Comment features, community forums, and social networks with social sharing functionality such as Like and Share buttons all enable consumers to actively interact with merchants and other users. Somewhat less obvious forms of interactivity include responsive design elements such as websites that change format depending on what kind of device they are being viewed on, product images that change as a mouse hovers over them, the ability to zoom in or rotate images, forms that notify the user of a problem as they are being filled out, and search boxes that autofill as the user types. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 1.3: Identify and describe the unique features of e-commerce technology and discuss their business significance. 43) All of the following types of e-commerce are distinguished by the nature of the market relationship rather than the type of technology used except: A) consumer-to-consumer (C2C) B) business-to-business e-commerce C) mobile e-commerce D) business-to-business (B2B) 11 Copyright © 2024 Pearson Education, Inc.

Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 1.4: Describe the major types of e-commerce. 44) Which of the following is a leading platform for social e-commerce? A) Amazon B) eBay C) Wikipedia D) Facebook Answer: D Difficulty: Easy AACSB: Information technology Learning Objective: 1.4: Describe the major types of e-commerce. 45) Business-to-consumer (B2C) e-commerce in the United States: A) has grown at double-digit rates since 2010. B) generates less revenue than C2C e-commerce. C) now constitutes more than 50% of the overall U.S. retail market. D) includes purchases of retail goods, services, and online content. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 46) Which of the following is not an example of an on-demand service company? A) Instacart B) Lyft C) DoorDash D) Facebook Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 47) Which of the following statements about B2B e-commerce is not true? A) B2B e-commerce is the largest from of e-commerce. B) There are two primary business models used in B2B e-commerce. C) B2B e-commerce still has significant growth potential. D) In 2022, business-to-business exchanges of all kinds, online and offline, were estimated to be around $8.5 trillion. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce.

48) All of the following were among the original platforms for C2C e-commerce except: A) eBay. B) Amazon. C) Craigslist. D) Etsy. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 49) All of the following are platforms for social e-commerce except: A) Instagram. B) TikTok. C) Y Combinator. D) Pinterest. Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 50) It is estimated that by 2026, B2B e-commerce will reach almost ________ in revenues. A) $100 billion B) $1 trillion C) $10 trillion D) $100 trillion Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 51) M-commerce is the type of e-commerce that generates the most revenue. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce. 52) As online sales become a larger percentage of all sales, online sales growth will likely eventually decline. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.4: Describe the major types of e-commerce.

53) List and briefly explain the main types of e-commerce. Answer: The main types of e-commerce are business-to-consumer (B2C), in which online businesses attempt to reach individual consumers; business-to-business (B2B), in which businesses focus on selling to other businesses; consumer-to-consumer (C2C), which provides a market in which consumers can sell goods to each other; mobile e-commerce (m-commerce), which refers to the use of wireless digital devices to enable online transactions; social e-commerce, which is commerce enabled by social networks and online social relationships; and local e-commerce, which is e-commerce that is focused on engaging the customer based on his or her geographical location. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 1.4: Describe the major types of e-commerce. 54) What factors are driving the growth of m-commerce? Answer: Factors that are driving the growth of m-commerce include the increasing amount of time consumers are spending using mobile devices, larger smartphone screen sizes, greater use of responsive design enabling websites to be better optimized for mobile use and mobile checkout and payment, and enhanced mobile search functionality. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 1.4: Describe the major types of e-commerce. 55) Which of the following describes the basic web policy of large firms during the Invention period? A) Integrate social networks and the mobile platform with website marketing. B) Emphasize the necessity for the Web to generate profits. C) Use the Web to sell complex goods and services online. D) Maintain a basic, static website depicting the firm's brand. Answer: D Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 56) All of the following can be considered a precursor to e-commerce except: A) the development of the smartphone. B) Baxter Healthcare's PC-based remote order entry system. C) the French Minitel. D) the development of Electronic Data Interchange standards. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

57) ________ was the first truly large-scale digitally enabled transaction system in the B2C arena. A) Telex B) The Baxter Healthcare system C) The French Minitel D) Electronic Data Interchange (EDI) Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 58) The text identifies which of the following years as the year e-commerce began? A) 1983 B) 1985 C) 1995 D) 2001 Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 59) Which of the following is a characteristic of e-commerce during the Invention period? A) mobile technology B) earnings and profit emphasis C) low-complexity retail products D) extensive government surveillance Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 60) All of the following are examples of Web 2.0 except: A) photo-sharing websites. B) blogs. C) wikis. D) online social networks. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

61) Which of the following is not a characteristic of a nearly perfect competitive market? A) Price, cost, and quality information are equally distributed. B) A nearly infinite set of suppliers compete against one another. C) Customers have access to all relevant information worldwide. D) It is highly regulated. Answer: D Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 62) All of the following were visions of e-commerce expressed during the early years of e-commerce except: A) the elimination of monopoly profits. B) friction-free commerce. C) disintermediation. D) strategic follower strength. Answer: D Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 63) Unfair competitive advantages occur when: A) one competitor has an advantage that others cannot purchase. B) market intermediaries are displaced. C) information is equally distributed and transaction costs are low. D) firms are able to gather monopoly profits. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 64) The early years of e-commerce were driven by all of the following factors except: A) an emphasis on exploiting traditional distribution channels. B) an infusion of venture capital funds. C) an emphasis on quickly achieving very high market visibility. D) visions of profiting from new technology. Answer: A Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

65) Which of the following statements about the Consolidation phase of e-commerce is not true? A) Many critics doubted the long-term prospects for e-commerce. B) Emphasis shifted from a more business-driven approach. C) Large traditional firms learned how to use the Web to strengthen their market positions. D) The development of the mobile platform fueled a surge in e-commerce revenues. Answer: D Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 66) Which of the following best describes the early years of e-commerce? A) They were a technological success but a mixed business success. B) They were a technological success but a business failure. C) They were a technological failure but a business success. D) They were a mixed technological and business success. Answer: A Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 67) Which of the following is a characteristic of the Reinvention phase of e-commerce? A) massive proliferation of dot-com start-ups B) widespread adoption of broadband networks C) rapid growth of search engine advertising D) the rapid growth of Web 2.0 Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 68) Which of the following is a characteristic of the Consolidation phase of e-commerce? A) first-mover advantages B) emphasis on revenue growth versus profits C) high-complexity retail products and services D) extensive government surveillance Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

69) Which of the following is not true regarding e-commerce today? A) Economists' visions of a friction-free market have not been realized. B) Consumers are less price-sensitive than expected. C) Price dispersion remains pervasive in many markets. D) Intermediaries have disappeared. Answer: D Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 70) Which of the following statements is not true? A) Information asymmetries are continually being introduced by merchants and marketers. B) First-mover advantage appears to have succeeded only for a very small group of companies. C) Overall transaction costs have dropped dramatically. D) Brands remain very important in e-commerce. Answer: C Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 71) Which of the following is an example of an e-commerce first mover that failed? A) Etsy B) eToys C) eBay D) E*Trade Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 72) Which of the following refers to the practice of researching a product online before purchasing it at a physical store? A) zooming B) grazing C) showrooming D) webrooming Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

73) Which of the following refers to the displacement of market middlemen and the creation of a new direct relationship between producers and consumers? A) network effect B) disintermediation C) friction-free commerce D) first mover advantage Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 74) Which of the following is not an element of friction-free commerce? A) Information is equally distributed. B) It enables extraordinary returns on invested capital. C) Prices can be dynamically adjusted to reflect actual demand. D) Unfair competitive advantages are eliminated. Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 75) Which of the following is not an example of an on-demand, personal services business that emerged during the Reinvention period of e-commerce? A) Airbnb B) Y Combinator C) Instacart D) DoorDash Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 76) The emergence of mobile, social, and local e-commerce occurred during the Consolidation period of e-commerce. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 77) The Reinvention period of e-commerce is as much a sociological phenomenon as it is a technological or business phenomenon. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

78) Price dispersion has been eliminated in e-commerce. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 79) What is a first mover? Why was being a first mover considered to be important during the early years of e-commerce? Answer: First movers are firms who are first to market in a particular area, and who move quickly to gather market share. First movers hope to establish a large customer base quickly, build brand name recognition early, and inhibit competitors by building in switching costs for their customers through proprietary interface designs and features. The thinking was that once customers became accustomed to using a company's unique web interface and feature set, they could not easily be switched to competitors. In the best case, the entrepreneurial firm would invent proprietary technologies and techniques that almost everyone adopted, creating a network effect, which occurs where all participants receive value from the fact that everyone else uses the same tool or product. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today. 80) Describe the visions and forces during the early days of e-commerce in terms of what the various interest groups hoped for: the computer science and information technology people; the economists; and the entrepreneurs, venture capitalists and marketers. Explain whether what each group envisioned came to fruition and why or why not. Answer: The computer scientists and information technologists' vision included universal communications and a computing environment that everyone could access with inexpensive computers. Their interest was in creating a vast worldwide information collection from libraries, universities, governments, and scientific institutions that was ungoverned by any nation and free to all. They believed that the Internet, and by extension, the e-commerce that operated within the infrastructure, should be self-governed and self-regulated. The economists envisioned a near-perfect competitive market where price, cost, and quality information are equally distributed. The marketspace would include a nearly infinite number of suppliers with equal access to hundreds of millions of customers, but where those consumers in turn would have access to all relevant market information–a hypercompetitive market. Market intermediaries would disappear, resulting in lowered costs to consumers. This intensely competitive, disintermediated environment with lowered transaction costs would eliminate product brands as well as the possibility of monopoly profits based on brands, geography, or special access factors. Unfair competitive advantages and the ability to reap returns on capital that far extended a fair market rate of return would be eliminated. Their vision was called friction-free commerce. The entrepreneurs, venture capitalists, and marketers in turn saw e-commerce as an opportunity to earn great returns on invested capital. They saw the e-commerce marketspace and technologies as a powerful method of increasing their ability to even more precisely segment the market into groups with different price sensitivities. They believed that huge profits could be garnered by firms that quickly achieved high market visibility and that these successful first movers would become the new intermediaries of e-commerce, displacing the traditional retail merchants and content suppliers. 20 Copyright © 2024 Pearson Education, Inc.

The computer scientists' vision of an ungoverned Internet has not come to fruition as governments have increasingly sought to regulate and control the technology to ensure that positive social benefits result. The economists' vision has also for the most part not materialized for a variety of reasons. Consumers have proven to be less price sensitive than expected and the importance of brand names to consumers' perceptions of quality and service has been extended rather than decreased or eliminated. Entrepreneurs have discovered new methods for differentiating products and services. New information asymmetries are continually being introduced by marketers. Disintermediation has also not occurred as new intermediaries emerged. The visions of the entrepreneurs, venture capitalists, and marketers have also largely not come to fruition as the first movers from the early years of e-commerce only rarely succeeded. The fast follower large traditional firms with the resources needed to develop mature markets are displacing most of the venture capitalist backed entrepreneurs. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 1.5: Understand the evolution of e-commerce from its early years to today.

81) Above all, e-commerce is a ________ phenomenon. A) technology driven B) finance-driven C) sociological D) government-driven Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce. 82) Which of the following statements about understanding e-commerce is not true? A) No single academic discipline encompasses all of e-commerce. B) To truly understand e-commerce, you need to know about the technologies that underly it. C) It is the business applications, rather than technology, that create the interest and excitement in e-commerce. D) E-commerce is unlike other previous technologically driven commercial developments in that social, cultural, and political issues related to e-commerce preceded the development of commercial applications of the technology. Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce. 83) Which of the following is an important societal issue related to e-commerce? A) consumer behavior B) value webs C) cloud computing D) preservation of privacy Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce. 84) E-commerce poses special challenges to methods used in the past to protect intellectual property rights. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.

85) What kind of problems does the global nature of e-commerce pose? Answer: The global nature of e-commerce poses public policy issues regarding equity, equal access, content regulation, and taxation. For instance, in the United States, public telephone utilities are required under public utility and public accommodation laws to make basic service available at affordable rates, so everyone can have telephone service. Should these laws be extended to the Internet and the Web? If goods are purchased by a New York State resident from a website in California, shipped from a center in Illinois, and delivered to New York, what state has the right to collect a sales tax? Should some heavy Internet users who consume extraordinary amounts of bandwidth by streaming endless movies be charged extra for service, or should the Internet be neutral with respect to usage? What rights do nation-states and their citizens have with respect to the Internet, the Web, and e-commerce? Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 1.6: Describe the major themes underlying the study of e-commerce.

E-commerce 2023, 17e (Laudon/Traver) Chapter 2 E-commerce Business Models and Concepts 1) Which of the following is at the very heart of a company's business model? A) Market strategy B) Value proposition C) Competitive advantage D) Revenue model Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 2) Which of the following uses a subscription revenue model for e-books? A) Spotify B) Scribd C) eHarmony D) Ancestry Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 3) Which element of the business model defines how a company's product or service fulfills the needs of customers? A) competitive environment B) competitive advantage C) market strategy D) value proposition Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 4) Which element of the business model refers to the power of customers and suppliers over a business? A) value proposition B) competitive environment C) competitive advantage D) market opportunity Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

5) Which of the following are Amazon's primary value propositions? A) personalization and customization B) selection and convenience C) reduction of price discovery cost D) management of product delivery Answer: B Difficulty: Easy AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 6) A firm's ________ describes how a firm will produce a superior return on invested capital. A) value proposition B) revenue model C) market strategy D) competitive advantage Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 7) A firm's competitive environment refers to all of the following except: A) other business selling similar products in the same marketspace B) the presence of substitute products C) potential new entrants to the market D) the plan a business develops to attract customers Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 8) Stickiness is an important attribute for which of the following revenue models? A) advertising revenue model B) subscription revenue model C) sales revenue model D) affiliate revenue model Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

9) Which of the following companies uses a transaction fee revenue model? A) Yahoo B) E*Trade C) Twitter D) Amazon Kindle Unlimited Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 10) Which of the following is an example of the affiliate revenue model? A) Yahoo B) eBay C) Netflix D) MyPoints Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 11) Which of the following involves a company giving away a certain level of product or service without charge, but then charging a fee for premium levels of the product or service? A) advertising revenue model B) subscription revenue model C) freemium strategy D) premium strategy Answer: C Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 12) Which of the following factors is not a significant influence on a company's competitive environment? A) how many competitors are active B) what the market share of each competitor is C) the availability of supportive organizational structures D) how profitable competitors are Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

13) Which of the following statements is not true? A) Priceline and Expedia are direct competitors. B) CNN and ESPN are indirect competitors. C) Automobile manufacturers and airline industries are direct competitors. D) CNN and ESPN both compete for consumers' time online. Answer: C Difficulty: Easy AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 14) The existence of many competitors in any one market segment may indicate: A) an untapped market niche. B) the market is saturated. C) no one firm has differentiated itself within that market. D) a market that has already been tried without success. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 15) Which of the following statements about equity crowdfunding is not true? A) Only wealthy accredited investors can participate in equity crowdfunding. B) Regulation crowdfunding is another name for equity crowdfunding. C) Currently, a company can crowdfund up to $5 million over a 12-month period. D) Equity crowdfunding allows companies to solicit investors to invest in small and early stage startups in exchange for stock. Answer: A Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 16) A perfect market is one in which: A) there are no competitive advantages or asymmetries because all firms have equal access to all the factors to production. B) one firm develops an advantage based on a factor of production that other firms cannot purchase. C) one participant in the market has more resources than the others. D) competition is at a minimum, as each niche market within an industry is served by the company with the greatest competitive advantage. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

17) Organizations that typically provide an array of services to startup companies along with a small amount of funding are referred to as: A) angel investors. B) crowdfunders. C) incubators. D) venture capital investors. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 18) A ________ specifically details how you plan to find customers and to sell your product. A) sales analysis B) business plan C) competitive strategy D) market strategy Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 19) Which of the following uses a subscription-based sales revenue model? A) Yahoo B) eBay C) MyPoints D) Dollar Shave Club Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 20) All of the following may lead to a competitive advantage except: A) less expensive suppliers. B) better employees. C) fewer products. D) superior products. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

21) Which of the following is an unfair competitive advantage? A) brand name B) access to global markets C) lower product prices D) superior technology Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 22) Which of the following gives a business model the most credibility with outside investors? A) the firm's management team B) the firm's value proposition C) the firm's market opportunity D) the firm's market strategy Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 23) Which of the following statements about Foursquare is not true? A) Foursquare is one of the Internet's largest location data tracking firms. B) Foursquare's initial business model focused on its social mobile app. C) The growth in Foursquare's revenue has been driven primarily by significant increases in the numbers of users of its Swarm app. D) Foursquare characterizes itself as a leader on privacy issues. Answer: C Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 24) Which type of investor typically becomes interested in a startup company after it has begun generating revenue? A) incubators B) angel investors C) crowdfunders D) venture capital investors Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

25) Which of the following is another name for a revenue model? A) business model B) business strategy C) financial model D) financial statements Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 26) Amazon's move into the online grocery business is an example of which of the following? A) first-mover advantage B) differentiation C) leverage D) focus Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 27) A wealthy individual who invests personal funds in a startup in exchange for an equity share in the business is referred to as a(n): A) incubator. B) angel investor. C) venture capital investor. D) crowdfunder. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 28) Which of the following is not a key element of an elevator pitch? A) exit strategy B) growth metrics C) legal structure D) market opportunity Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

29) First movers often fail because: A) their competitive advantage is unfair. B) they lack complementary resources needed to sustain their advantages. C) they are operating in a perfect market. D) they fail to leverage their competitive assets. Answer: B Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 2.1: Identify the key components of e-commerce business models. 30) Which of the following types of crowdfunding involves people making contributions to others with no expectation of any return? A) donor-based crowdfunding B) rewards-based crowdfunding C) equity crowdfunding D) regulation crowdfunding Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 31) A value proposition defines how a company's product or service will generate revenue for the firm. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 32) Real markets are imperfect. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 33) Information asymmetries enable some firms to have an edge over others. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 34) Google is an example of first-mover advantage. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models.

35) M-commerce is a distinct business model. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 36) GoFundMe is a prominent example of a rewards-based crowdfunding site. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 37) Why is the management team such an important element of a business model? Answer: A strong management team gives a model instant credibility to outside investors, immediate market-specific knowledge, and experience in implementing business plans. A strong management team may not be able to salvage a weak business model, but the team should be able to change the model and redefine the business as it becomes necessary. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 2.1: Identify the key components of e-commerce business models. 38) Who are the e-commerce enablers and why are they important? Answer: E-commerce enablers provide the hardware, operating system software, networks and communications technology, applications software, web design, consulting services, and other tools required for e-commerce. While these firms may not be conducting e-commerce per se (although in many instances, e-commerce in its traditional sense is in fact one of their sales channels), as a group they have perhaps profited the most from the development of e-commerce. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 2.1: Identify the key components of e-commerce business models. 39) Define elevator pitch and describe its key elements. Answer: An elevator pitch is a short two-to-three-minute presentation aimed at convincing investors to invest. The key elements of an elevator pitch are an introduction, in which you state your name and position, your company's name and a tagline in which you compare what your company does to a well-known company; background, in which you state the origin of your idea, and the problem you are trying to solve, the industry size/market opportunity, in which you provide brief facts about the size of the market; revenue model/numbers/growth metrics, in which you provide insight into your company's revenue model and results thus far, how fast it is growing, and early adopters, if there are any; funding, in which you state the amount of funds you are seeking and what it will help you achieve; and finally exit strategy, in which you explain how your investors will achieve a return on their investment. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 2.1: Identify the key components of e-commerce business models.

40) Define organizational development and describe its importance in relation to the implementation of a business plan and strategy. Answer: Organizational development is a plan that describes how the company will organize the work that needs to be accomplished in the business plan or strategy. Typically, work is divided into functional departments, such as production, shipping, marketing, customer support, and finance. Jobs within these functional areas are defined, and then recruitment begins for specific job titles and responsibilities. Typically, in the beginning, generalists who can perform multiple tasks are hired. As the company grows, recruiting becomes more specialized. For instance, at the outset, a business may have one marketing manager. But after two or three years of steady growth, that one marketing position may be broken down into seven separate jobs done by seven individuals. All firms – new ones in particular – need an organization to efficiently implement their business plans and strategies. Many e-commerce firms and many traditional firms that attempt an e-commerce strategy have failed because they lacked the organizational structures and supportive cultural values required to support new forms of commerce. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.1: Identify the key components of e-commerce business models. 41) All of the following can be considered examples of the market creator business model except: A) eBay. B) Etsy. C) Uber. D) Twitter. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.1: Identify the key components of e-commerce business models. 42) Which of the following is not a community provider? A) LinkedIn B) Facebook C) Bluefly D) Pinterest Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models.

43) Which of the following is not a variation of the e-tailer business model? A) omnichannel merchant B) virtual merchant C) market creator D) manufacturer-direct Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 44) Which of the following is an example of a company using the content provider model? A) Expedia B) Netflix C) Dell D) eBay Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 45) Which of the following is not an example of the manufacturer-direct business model? A) Dell B) Nike C) Wayfair D) Everlane Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 46) In general, the key to becoming a successful content provider is to: A) own the content being provided. B) own the technology by which content is created, presented, and distributed. C) provide online content for free. D) provide other services as well as online content. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models.

47) The term "creators" was a label originated by which of the following? A) Facebook B) Yahoo C) Google D) YouTube Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 48) Which of the following is not considered a portal? A) Yahoo B) MSN C) Amazon D) AOL Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 49) Portals primarily generate revenue in all of the following ways except: A) charging advertisers for ad placement. B) collecting transaction fees. C) sales of goods. D) charging subscription fees. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 50) The basic value proposition of community providers is: A) they offer a fast, convenient one-stop platform where users can focus on their most important concerns and interests. B) they offer consumers valuable, convenient, time-saving, and low-cost alternatives to traditional service providers. C) they create a digital environment for buyers and sellers to meet, agree on a price, and transact. D) they increase customers' productivity by helping them get things done faster and less expensively. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models.

51) Which of the following statements about user generated content and creators is not true? A) Creators can be considered a subset of influencers. B) Creators have come to occupy an ever-increasing role in the online content landscape. C) More than 200 million people characterize themselves as creators. D) The "creator economy" is rapidly growing. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 52) All of the following are horizontal portals except: A) MSN B) Sailnet C) Yahoo D) AOL Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 53) The financial services and travel services industries typically use the ________ business model. A) community provider B) transaction broker C) market creator D) e-tailer Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 54) In the ________ business model, a business builds a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices. A) market creator B) community provider C) e-tailer D) portal Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models.

55) On-demand service companies are characterized by the free sharing of resources between the company and consumers. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.2: Describe the major B2C business models. 56) Define and describe the transaction broker business model and discuss value proposition, revenue model, market opportunities, and competitive environment for this type of B2C firm. Answer: The transaction broker business model provides online order processing for transactions that were previously normally handled in person, by phone, or by mail. It is most commonly found in the financial services and travel services industries. The primary value proposition for a transaction broker is the saving of time and money. These companies also often provide relevant content. The revenue model for these firms is based upon receiving commissions or transaction fees each time a transaction occurs. Online stock trading firms receive either a flat fee for each transaction or a fee based on a sliding scale according to the size of the transaction. Attracting new customers and encouraging them to trade are the keys to generating more revenue for these companies. Online travel companies generate commissions from travel bookings. Market opportunities for transaction brokers in financial services are increasing due to the rising interest in online financial services. However, there is some market resistance due to consumers' fear of loss of privacy and loss of control over their personal financial information. To compete effectively, online brokers must convince consumers that they have effective security and privacy procedures in place, and like physical banks and brokerage firms, provide a broad range of financial services, not just stock trading. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.2: Describe the major B2C business models. 57) All of the following are examples of business-to-business (B2B) business models except: A) e-distributors. B) e-procurement. C) exchanges. D) portals. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models.

58) What is the primary revenue model for an e-distributor? A) sales B) transaction fee C) advertising D) subscription Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 59) Grainger is an example of which of the following business models? A) B2B service provider B) exchange C) e-distributor D) industry consortia Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 60) Ariba Network is an example of a(n): A) e-distributor. B) portal. C) e-procurement firm. D) industry consortium. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 61) Procter & Gamble operates which of the following? A) private B2B network B) e-procurement company C) exchange D) industry consortium Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models.

62) Go2Paper is an example of which of the following business models? A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 63) SupplyOn is an example of which of the following? A) private B2B network B) exchange C) industry consortium D) e-distributor Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 64) A ________ marketplace supplies products and services of interest to a particular industry. A) perfect B) differentiated C) horizontal D) vertical Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models. 65) SaaS and PaaS providers can typically provide services at lower costs through scale economies. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.3: Describe the major B2B business models.

66) What is a B2B exchange, and what benefits do they offer? Answer: An exchange is an independent digital marketplace that connects hundreds to potentially thousands of suppliers and buyers in a dynamic, real-time environment. Exchanges are typically owned by independent firms whose business is making a market, and they generate revenue by charging a commission or fee based on the size of the transactions conducted among trading parties. They usually serve a single vertical industry and focus on the exchange of direct inputs to production and short-term contracts or spot purchasing. For buyers, B2B exchanges make it possible to gather information, check out suppliers, collect prices, and keep up to date on the latest happenings all in one place. Sellers, on the other hand, benefit from expanded access to buyers. The greater the number of sellers and buyers, the higher the chances of making a sale. Exchanges make it significantly less expensive and time-consuming to identify potential suppliers and customers and for them to do business with one another. As a result, they can lower transaction costs–the cost of making a sale or purchase. Exchanges can also lower product costs and inventory-carrying costs–the cost of keeping a product on hand in a warehouse. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 2.3: Describe the major B2B business models. 67) A ________ refers to a competitive strategy in which firms attempt to achieve lower business process costs. A) strategy of cost competition B) scope strategy C) customer intimacy strategy D) focus/market niche strategy Answer: A Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 68) Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry but greatly expands the market at the same time? A) global reach B) richness C) interactivity D) personalization Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.

69) Which of the following is not a primary activity in a firm value chain? A) outbound logistics B) finance/accounting C) operations D) after-sales service Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 70) Which of the following is a networked business ecosystem that coordinates a firm's suppliers, distributors, and delivery firms with its own production needs using Internet technology. A) value chain B) value system C) value web D) business strategy Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 71) If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would: A) enable individual customization of the product by consumers. B) implement a strategy of commoditization. C) adopt a strategy of cost competition. D) develop a scope strategy to compete within a narrower market segment. Answer: A Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 72) A strategy designed to compete within a narrow market or product segment is called a ________ strategy. A) scope B) differentiation C) commoditization D) focus Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 41 Copyright © 2024 Pearson Education, Inc.

73) ________ technologies are technologies that enable the incremental improvement of products and services. A) Sustaining B) Differentiating C) Disruptive D) Commodity Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 74) Innovative entrepreneurs and their business firms that destroy existing business models are referred to as: A) crowdfunders. B) venture capitalists. C) disruptors. D) angel investors. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 75) The term unfit fitness refers to a situation in which employees of a firm have the wrong skills for the current environment. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 76) Scale economies are efficiencies that result from increasing the size of the business. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 77) A company's strong linkages with its customers increase switching costs. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 78) The Internet's universal standards have changed industry structure by increasing barriers to 42 Copyright © 2024 Pearson Education, Inc.

entry and decreasing competition within an industry. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 79) Interactivity that enables product customization alters industry structure by decreasing the threat of substitutes. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 80) E-commerce has increased price competition in many markets. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 81) Social technologies change industry structure by weakening powerful sales channels and shifts bargaining power to consumers. Answer: FALSE Difficulty: Difficult AACSB: Information technology Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.

82) Briefly discuss the difference between a scope strategy and a focus/market niche strategy and provide an example of each. Answer: A scope strategy is a strategy to compete in all markets around the globe, rather than merely in local, regional, or national markets. The Internet's global reach, universal standards, and ubiquity can certainly be leveraged to assist businesses in becoming global competitors. eBay, for instance, along with many of the other top e-commerce companies, has readily attained a global presence. Apple is another example. A focus/market niche strategy is a strategy to compete within a narrow market segment or product segment. This is a specialization strategy with the goal of becoming the premier provider in a narrow market. For instance, Dick's Sporting Goods uses e-commerce to continue its historic focus on sports equipment and apparel; and W. W. Grainger focuses on the narrow MRO market segment. Bonobo's, which focused on men's clothing, is another example. E-commerce offers some obvious capabilities that enable a focus strategy. Businesses can leverage richness and interactivity to create highly focused messages for different market segments; information intensity makes it possible to focus e-mail and other marketing campaigns on small market segments; personalization–and related customization–means the same product can be personalized and customized to fulfill the very focused needs of specific market segments and consumers. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.

83) Briefly discuss the implications of each of the unique features of e-commerce technology for the overall business environment. Answer: The ubiquity of e-commerce creates new marketing channels and expands the size of the overall market. It also creates new efficiencies in industry operations and lowers the costs to firms of sales operations. The ubiquity of e-commerce also enables differentiation strategies. The global reach of e-commerce lowers barriers to entry and expands the market at the same time. This lowers the costs of both industry and firm operations through production and sales efficiencies. It enables competition on a global scale. The universal standards of e-commerce lower barriers to entry while at the same time intensifying competition within an industry. Universal standards also reduce the costs for communications and computing, enabling firms to engage in broad-scope strategies. The richness of e-commerce reduces the strength of powerful distribution channels. It also allows firms to reduce their reliance on traditional sales forces and can enhance post-sales support services. The interactivity of e-commerce reduces the threat of substitutes through the enhanced use of customization. It also reduces industry and firm costs by reducing reliance on sales forces. It also enables differentiation strategies. Information density weakens powerful sales channels, thus shifting bargaining power to the consumer, while also lowering the costs of obtaining, processing, and distributing information about suppliers and consumers. The use of e-commerce technology to personalize and customize a customer's experience or product reduces threats of substitutes, raises barriers to entry, reduces value chain costs by lessening reliance on sales forces, and enables personalized marketing strategies. The use of social technologies shifts programming and editorial decisions to consumers; creates substitute entertainment products; and energizes a large group of new suppliers. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. 84) Define value chain and explain the difference between a firm value chain, an industry value chain, and a value web. Answer: A value chain is the set of activities performed that transforms raw inputs into final products and services. Each of these activities adds economic value to the final product. A firm value chain is the set of activities a firm engages in to create final products from raw inputs. The key steps and support activities in a firm's value chain are inbound logistics, operations, outbound logistics, sales and marketing, and after sales service. With an industry value chain, the chain broadens to include six generic players: suppliers, manufacturers, transporters, distributors, retailers, and customers. A value web coordinates a firm's suppliers with its own production needs using an Internet-based supply chain management system. It is a networked trans-business system that coordinates the value chains of several firms. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce.

85) Describe the four stages involved in business model disruption. Answer: In the first disruptive stage, disruptors, often funded by new sources of finance, introduce new products that are less expensive, less capable, and of poorer quality than existing products. These early products nevertheless find a niche in a market that incumbents do not serve or are unaware of. In the second stage, disruptors improve their products at a rapid pace, taking advantage of newer technologies at a faster pace than incumbents, expanding their niche market, and eventually attracting a larger customer base from the incumbents' market. In the third stage, the new products and business model become good enough, and even superior to products offered by incumbents. In the fourth stage, incumbent companies lose market share, and either go out of business or are consolidated into other more successful firms that serve a much more limited customer base. Some incumbents survive by finding new customers for their existing product, adopting some of the newer products and business models in separate divisions of their firms, or moving into other often nearby markets. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 2.4: Understand the key business concepts and strategies applicable to e-commerce. E-commerce 2023, 17e (Laudon/Traver) Chapter 3 E-commerce Infrastructure: The Internet, the Web, and the Mobile Platform 1) The Institutionalization phase of Internet development took place during which of the following time periods? A) 1950-1960 B) 1961-1974 C) 1975-1995 D) 1995 to the present Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 2) Which of the following occurred during the Commercialization phase of Internet development? A) E-mail was invented. B) IBM introduced the IBM PC. C) Mosaic was invented. D) Major telecommunications companies took over the operation of the Internet backbone. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 3) During which phase of the development of the Internet was the Domain Name System (DNS) introduced? A) Commercialization phase B) Institutionalization phase 46 Copyright © 2024 Pearson Education, Inc.

C) Innovation phase D) Consolidation phase Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

4) Which of the following is not one of the basic technological foundations of the Internet? A) client/server computing B) FTP C) TCP/IP D) packet switching Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 5) The process of slicing digital messages into parcels, sending them along different communication paths as they become available, and reassembling them at the destination point is called: A) routing. B) hyperlinking. C) packet switching. D) transporting. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 6) Which of the following is the core communications protocol for the Internet? A) Telnet B) FTP C) TCP/IP D) TLS Answer: C Difficulty: Easy AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 7) The Transport Layer of TCP/IP is responsible for which of the following? A) placing packets on and receiving them from the network medium B) addressing, packaging, and routing messages C) providing communication with the application by acknowledging and sequencing the packets to and from the application D) providing a variety of applications with the ability to access the services of the lower layers Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 48 Copyright © 2024 Pearson Education, Inc.

8) The Internet Layer of TCP/IP is responsible for which of the following? A) placing packets on and receiving them from the network medium B) addressing, packaging, and routing messages C) providing communication with the application by acknowledging and sequencing the packets to and from the application D) providing a variety of applications with the ability to access the services of the lower layers Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 9) An IPv4 address is expressed as a: A) 32-bit number that appears as a series of four separate numbers separated by semicolons. B) 64-bit number that appears as a series of four separate numbers separated by semicolons. C) 64-bit number that appears as a series of four separate numbers separated by periods. D) 32-bit number that appears as a series of four separate numbers separated by periods. Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 10) The ________ allows a natural language expression, such as Google.com to represent a numeric IP address. A) QUIC protocol B) UDP protocol C) domain name system D) assigned numbers and names (ANN) system Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 11) The address used by a browser to identify the location of content on the Web is called: A) a domain name. B) a Uniform Resource Locator. C) an IP address. D) a file path. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

12) Which of the following is not an advantage of client/server computing over centralized mainframe computing? A) It is easy to expand capacity by adding servers and clients. B) Each client added to the network increases the network's overall capacity and transmission speeds. C) Client/server networks are less vulnerable, in part because the processing load is balanced over many powerful smaller computers rather than concentrated in a single huge computer. D) There is less risk that a system will completely malfunction because backup or mirror servers can pick up the slack if one server goes down. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 13) ________ is a model of computing in which computer processing, storage, software, and other services are provided as a shared pool of virtualized resources over the Internet. A) Client/server computing B) P2P computing C) Mobile computing D) Cloud computing Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 14) Which of the following protocols is used to send e-mail to a server? A) SMTP B) FTP C) HTTP D) SSL Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

15) Where does TLS operate within TCP/IP? A) between the Internet Layer and the Transport Layer B) between the Transport Layer and the Application Layer C) between the Network Interface Layer and the Transport Layer D) between the Internet Layer and the Application Layer Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 16) Which of the following statements about cloud computing is not true? A) A public cloud is typically used by companies with stringent privacy and security requirements. B) Dropbox is an example of a public cloud. C) Hybrid clouds offer both public and private cloud options. D) A private cloud may be hosted internally or externally. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 17) Which of the following is rarely used today, due to security concerns. A) Telnet B) SFTP C) TCP D) TLS Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 18) Which of the following protocols provides an alternative to TCP when the error-checking and correction functionality of TCP is not necessary? A) UDP B) IP C) BPG D) TLS Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

19) Which of the following technologies has enabled the Internet to grow exponentially to support millions of users, without overloading the network architecture? A) fiber optics B) Wi-Fi C) FTP D) client/server computing Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 20) Which of the following are specialized computers that transmit message parcels along available Internet communication paths and on to their destinations? A) routers B) Web servers C) IP servers D) packet servers Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 21) Which of the following is a set of rules for transferring data? A) protocol B) packet C) router D) IP address Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 22) Which of the following is not a basic type of cloud computing service? A) IaaS B) PaaS C) SaaS D) FiOS Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

23) Which of the following are central directories that list all domain names currently in use for specific domains? A) web servers B) root servers C) client servers D) DNS servers Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 24) Which of the following was the original purpose of the Internet? A) to provide a network that would allow businesses to connect with consumers B) to link large mainframe computers on different college campuses C) to develop a military communications system that could withstand nuclear war D) to enable government agencies to track civilian communications Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 25) Which of the following protocols does Facebook use for more than 75% of its Internet traffic? A) TCP B) BGP C) QUIC D) FTP Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 26) Which of the following protocols enables the exchange of routing information among different autonomous systems on the Internet? A) HTTP B) BGP C) FTP D) SMTP Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 27) In the United States, about ________ of Internet traffic now occurs over Internet Protocol 53 Copyright © 2024 Pearson Education, Inc.

version 6 (IPv6). A) 10% B) 20% C) 40% D) 60% Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 28) The term latency refers to a delay that can be experienced in packet-switched networks. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 29) Edge computing improves response time and saves bandwidth. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 30) A private cloud is operated for the benefit of multiple firms. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 31) Amazon Web Services is an example of a private cloud. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 32) HTTP/2 has been adopted by almost all websites. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 33) HTTP/3 uses QUIC rather than TCP as its transport protocol. 54 Copyright © 2024 Pearson Education, Inc.

Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 34) What are the essential characteristics of cloud computing? Answer: The U.S. National Institute of Standards and Technology (NIST) defines cloud computing as having the following essential characteristics: on-demand self-service (consumers can obtain computing capabilities such as server time or network storage as needed automatically on their own); ubiquitous network access (cloud resources can be accessed using standard network and Internet devices, including mobile platforms); Location-independent resource pooling (the pooling of computing resources to serve multiple users, with different virtual resources dynamically assigned according to user demand); rapid elasticity (computing resources can be rapidly provisioned, increased, or decreased to meet changing user demand); and measured service (charges for cloud resources are based on the amount of resources actually used). Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 35) What are the implications of cloud computing for e-commerce? Answer: Cloud computing has many significant implications for e-commerce. For e-commerce firms, cloud computing radically reduces the cost of building and operating websites because the necessary hardware infrastructure and software can be licensed as a service from cloud service providers at a fraction of the cost of purchasing these services as products. This means firms can adopt "pay-as-you-go" and "pay-as-you-grow" strategies when building out their websites. For instance, according to Amazon, hundreds of thousands of customers use Amazon Web Services. For individuals, cloud computing means you no longer need a powerful laptop or desktop computer to engage in e-commerce or other activities. Instead, you can use much less-expensive tablet computers or smartphones that cost far less. For corporations, cloud computing means that a significant part of hardware and software costs (infrastructure costs) can be reduced because firms can obtain these services online for a fraction of the cost of owning, and they don't have to hire an IT staff to support the infrastructure. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet.

36) List and briefly describe each of the three important concepts behind the Federal Networking Council's definition of the term Internet. Answer: The three important concepts in the Federal Networking Council's definition of the Internet are packet switching, the TCP/IP communications protocol, and client/server computing. Packet switching is a method of slicing digital messages up into parcels that are sent along different communications paths as they become available. The packets travel from router computer to router computer and are then reassembled at their destination point. These routers are special purpose computers that interconnect the thousands of computer networks that make up the Internet. Since this method does not require a dedicated circuit, it makes use of any available spare capacity on any one of several hundred circuits enabling nearly full use of available communication lines and capacity. Transmission Control Protocol/Internet Protocol (TCP/IP) is the universally agreed upon method for breaking the messages up, routing them to their destination, and reassembling them. The TCP protocol, or set of rules, specifies how messages should be formatted, ordered, compressed, and checked for errors. It also stipulates which method the network will use to indicate that they have stopped sending and/or receiving messages and sometimes specifies the transmission speed as well. The IP protocol provides the addressing scheme for the Internet. Each computer connected to the Internet must be assigned an Internet Protocol address so that it can send and receive TCP packets. Client/server computing is a model of computing in which clients (various types of devices that can request access to services or resources) are connected in a network with one or more servers, which are computers that are dedicated to performing common functions that the clients on the network need, such as file storage, software applications, printing, and Internet access. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.1: Discuss the origins of, and the key technology concepts behind, the Internet. 37) Which of the following organizations focuses on the evolution of the Internet? A) IRTF B) ISOC C) W3C D) ICANN Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.2: Explain the current structure of the Internet. 38) TCP/IP operates in which layer of Internet architecture? A) Network Technology Substrate layer B) Middleware Services layer C) Transport Services and Representation Standards layer D) Applications layer Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 56 Copyright © 2024 Pearson Education, Inc.

39) The Web runs in which layer of Internet architecture? A) Network Technology Substrate layer B) Middleware Services layer C) Transport Services and Representation Standards layer D) Applications layer Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 40) Which layer of Internet architecture includes security, authentication/identity management, file systems, and storage repositories? A) Network Technology Substrate layer. B) Middleware Services layer. C) Transport Services and Representation Standards layer. D) Applications layer. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 41) MAEs are now more commonly referred to as: A) Tier 1 ISPs. B) Tier 2 ISPs. C) NAPs. D) IXPs. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 42) When talking about the physical elements of the Internet, the term redundancy refers to: A) transmitting multiple copies of a single packet to safeguard against data loss. B) the use of tiered high-speed switching computers to connect the backbone to regional and local networks. C) delays in messages caused by the uneven flow of information through the network. D) multiple duplicate devices and paths in a network built so that data can be rerouted if a breakdown occurs. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet.

43) The ________ is a consortium of corporations, government agencies, and nonprofit organizations that monitors Internet policies and practices. A) Internet Engineering Steering Group (IESG) B) World Wide Web Consortium (W3C) C) Internet Engineering Task Force (IETF) D) Internet Society (ISOC) Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.2: Explain the current structure of the Internet. 44) The ________ helps define the overall structure of the Internet. A) IAB B) IESG C) W3C D) ITU Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.2: Explain the current structure of the Internet. 45) The FCC currently defines broadband as providing service at a minimum of ________ for downloads and ________ for uploads. A) 25 Mbps; 3 Mbps B) 3 Mbps; 25 Mbps C) 65 Mbps; 28 Mbps D) 28 Mbps; 65 Mbps Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 3.2: Explain the current structure of the Internet. 46) Which of the following coordinates the Internet's system of unique identifiers? A) ICANN B) IAB C) ISOC D) W3C Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 3.2: Explain the current structure of the Internet.

47) Which of the following is not a concern about IoT? A) the falling cost of sensors B) interoperability C) security D) privacy Answer: A Difficulty: Easy AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 48) Which of the following statements about DSL is not true? A) DSL is a telephone technology. B) DSL service levels range from about 1 Mbps to 35 Mbps. C) DSL requires that customers live within two miles of a neighborhood telephone switching center. D) DSL provides guaranteed throughput. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 49) Which of the following statements about fiber-optic cable is not true? A) Fiber-optic cable transmits more data at faster speeds than coaxial or twisted copper cable. B) Fiber-optic cable is thinner and lighter than coaxial or twisted copper cable. C) Most U.S. homes have fiber-optic cable connections. D) FiOS uses fiber-optic cable. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 50) The major technologies used with wireless local area networks are: A) Wi-Fi and Bluetooth. B) Wi-Fi and WiMax. C) Bluetooth and 3G. D) WiMax and 3G. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet.

51) Which of the following standards provide for high-speed short-range Wi-Fi? A) WiGig B) WiMax C) Bluetooth D) Wi-Fi 6 Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 52) Which of the following is developing a smart home interoperability standard? A) Connectivity Standards Alliance. B) Industry IoT Consortium. C) Open Connectivity Foundation. D) W3C. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 53) Which of the following IEEE standards has been labeled by the Wi-Fi Alliance as Wi-Fi 6? A) IEEE 802.11ac B) IEEE 802.11ad C) IEEE 802.11ax D) IEEE 802.11ay Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 54) In which region of the world is Internet access growing the fastest? A) United States B) Western Europe C) Middle East/Africa D) Asia Pacific Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 55) T1 and T3 refer to international telephone standards for digital communication. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet.

56) Bluetooth is a high-speed, fixed broadband wireless local area network for commercial and residential use. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 57) Tier 1 ISPs provide Internet access to consumers and businesses. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 58) The United States has the world's highest average Internet connection speed. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 59) WLAN-based Internet access derives from the same technological foundations as telephone-based wireless Internet access. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.2: Explain the current structure of the Internet. 60) Define the terms broadband and fixed broadband and briefly describe the major types of fixed broadband service available. Answer: Broadband, in the context of Internet service, refers to any communication technology that permits clients to play streaming audio and video files at acceptable speeds. Fixed broadband includes Digital Subscriber Line (DSL), (including high-speed fiber optic services), cable, and telephone (T1 and T3). Digital Subscriber Line (DSL) service is a telephone technology that provides high-speed access to the Internet through ordinary telephone lines found in a home or business. FiOS (fiber-optic service) is an advanced form of DSL that uses fiber-optic cable rather than regular telephone lines. Cable Internet refers to a cable television technology that provides digital access to the Internet using the same analog or digital video cable providing television signals to a home. T1 and T3 are international telephone standards for digital communication. These are leased, dedicated, guaranteed lines suitable for corporations, government agencies, and businesses such as ISPs requiring high-speed guaranteed service levels. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.2: Explain the current structure of the Internet.

61) Define 5G and briefly discuss the products and services that it is expected to enable. Answer: 5G is a cellular standard for high-bandwidth mobile broadband. 5G provides for speeds reaching 10 Gbps or more, support for up to 100,000 connections per square kilometer (known as massive machine-to-machine (M2M) connections), and ultra-low latency (less than 10 milliseconds) communications. 5G utilizes a new part of the wireless spectrum (shorter millimeter waves in the 30 GHz to 300 GHz range) and requires the development of a transmission infrastructure involving tens of thousands of small cell and distributed antenna systems installed on utility poles, as well as additional investments in fiber optic networks. Fully functional 5G networks are expected to enable a number of innovative products and services–such as interactive, rich media applications; a new generation of smart wearables; and autonomous and remote-controlled devices–that will be able to take advantage of 5G's higher throughput and lower latency. In the near-term, 5G applications in the online retail industry are likely to be oriented around bandwidth-intensive applications such as livestreaming, augmented reality and virtual reality applications, as well as contactless payment solutions. Similarly, 5G is expected to enhance the production and delivery of "supercharged" online content as well as how that content can be experienced, ultimately enabling a more personalized user experience. Over time, 5G networks, coupled with other technologies such as cloud computing, edge computing, and artificial intelligence, could transform IoT devices into interactive portals for media and communication, leading to the development of an IoT "mediaverse." 5G is also expected to have a transformative impact on digital marketing and advertising, enabling advertisers to target 5G users with higher-resolution mobile video and rich media ads that load almost instantly, as well as ads that incorporate augmented and virtual reality. Ultimately, the combination of 5G, edge/cloud computing, artificial intelligence, and predictive analytics could make digital advertising more interactive and personal. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.2: Explain the current structure of the Internet. 62) What are some of the issues related to the Internet of Things (IoT)? Answer: Interoperability remains a major concern with IoT. The Open Connectivity Foundation is an industry organization that is hoping to create open-source standards for IoT that promote interoperability. A different group, the Industry IoT Consortium, has been formed by AT&T, Cisco, GE, IBM, and Intel to focus on engineering standards for industrial assets. In the smart home arena, the Connectivity Standards Alliance, with participation from more than 200 companies including Google/Nest, Apple, Amazon, and Samsung, is developing a smart home interoperability standard named Matter, which is expected to be launched by the end of 2022. Matter-compliant devices will be able to communicate with one another even if they are from different manufacturers. Other concerns include security and privacy. Security experts believe that IoT devices could potentially be a security disaster, with the potential for malware being spread through a connected network, and difficulty in issuing patches to devices, leaving them vulnerable. Data from standalone smart devices can reveal much personal detail about a consumer's life, and if those devices are all ultimately interconnected, there will be little that is truly private. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.2: Explain the current structure of the Internet. 62 Copyright © 2024 Pearson Education, Inc.

63) The first web browser to make it possible to view documents on the Web with colored background, images, and animations was: A) Netscape Navigator. B) Mosaic. C) Mozilla. D) Internet Explorer. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 64) In the address http://www.company.com/clients.html, which of the following is the top-level domain? A) .com B) company.com C) www D) http Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 65) You could expect to find all of the following services in a web server software package except: A) security services. B) FTP. C) search engine. D) an RSS aggregator. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 66) Which of the following is the most popular mobile web browser? A) Edge B) Safari C) Chrome D) Firefox Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works.

67) The concept behind document formatting had its roots in which of the following? A) XML B) SGML C) HTML D) GML Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 68) All of the following statements about HTML5 are true except: A) HTML5 has become the de facto web page development standard. B) HTML5 is an important tool for both responsive web design and adaptive web delivery. C) HTML5 apps work just like web pages. D) HTML5 stores page content in a mobile device's hardware rather loading it into the browser from a web server. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 69) HTML defines the structure of a web page. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works. 70) The major hubs in the United States where the Internet backbone intersects with regional and local networks are now commonly referred to as Internet Exchange Points (IXPs). Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.3: Understand how the Web works.

71) Briefly describe the development of the Web including the key players. Answer: The Web was invented between 1989 and 1991 when Dr. Tim Berners-Lee and his associates at the European Particle Physics Laboratory (also known as CERN) built on the ideas of several earlier researchers and developed the initial versions of HTML, HTTP, a web server, and a web browser, the four essential components of the Web. Information being shared on the Web remained text-based until Marc Andreessen and others at NCSA (National Center for Supercomputing Applications) created a web browser with a graphical user interface. This made it possible to view documents on the Web that included colored backgrounds, images, and primitive animations. In 1994 Andreessen and Jim Clark founded Netscape, which created the first commercial browser. In 1995 Microsoft released the first version of Internet Explorer and the Web began to take off. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.3: Understand how the Web works. 72) Which of the following was the first to launch an intelligent digital assistant? A) Facebook B) Apple C) Amazon D) Google Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 73) Which of the following enables Internet users to communicate with each other, although not in real time? A) mobile messaging B) online message board C) SMS messaging D) VoIP Answer: B Difficulty: Easy AACSB: Information technology Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.

74) Which of the following is not a mobile messaging application? A) Kik B) WhatsApp C) Viber D) Feedly Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 75) A(n) ________ enables documents to be written collectively and collaboratively. A) wiki B) podcast C) blog D) RSS feed Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 76) The protocol that enables the transmission of voice and other forms of audio communication over the Internet is called: A) VoIP. B) IPTP. C) VTP. D) IP. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 77) Snapchat's Lenses feature is an example of which of the following? A) artificial digital assistant B) virtual reality C) augmented reality D) mixed reality Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.

78) Metaverse-like experiences are being used primarily for gaming and advertising. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 79) Define and briefly describe Mark Zuckerberg's vision of the metaverse. Answer: The metaverse is envisioned as an immersive, visual, 3-D virtual reality in which users can connect, socialize, collaborate, and transact. Mark Zuckerberg, Facebook's founder and CEO, believes that the metaverse will become the center of the future Web, so much so that in October 2021, Facebook announced that it was rebranding as Meta. Zuckerberg believes that the metaverse is the ultimate expression of social technology. He characterizes it as an "embodied Internet" where instead of just viewing content in 2-D, you experience being "in it" just as if you were physically present. Although VR, AR, and metaverse-like experiences are currently being used primarily for gaming and advertising, Zuckerberg and others believe that the metaverse ultimately will create a profound change in the ways people experience online life and work. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce. 80) What is Web3 and how may it change the Web as we now know it? Answer: Although what some are calling "Web3" does not yet exist, the concepts surrounding it have been much in the news. Web3 is the name of a new kind of Internet service conceived as being built using blockchain. Blockchain is a distributed and shared ledger (database system) that underlies cryptocurrencies such as Bitcoin but that can also be used for a variety of other purposes. Proponents behind the concept of Web3 envision it as being much more decentralized than the current Web environment and controlled by creators and users rather than Big Tech companies. Centralized corporate platforms such as Google, Meta, and Twitter would be replaced with decentralized, community-run networks. Transparency and data privacy would be enhanced. Critics, on the other hand, point out that even the most advanced blockchain technology today could not begin to handle the amount of data that Facebook, YouTube, or Twitter processes daily. Some form of centralized services would be required, which would defeat the central purpose of Web3. Whether some version of Web3 will come to fruition in the future remains to be seen, but in the meantime, the hype around it is likely to continue. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.4: Describe how Internet and web features and services support e-commerce.

81) Which of the following statements about mobile apps is not true? A) Mobile apps have usurped television as the most popular entertainment medium. B) iOS apps are cross-platform, open-source applications. C) In 2021, more than 230 billion apps were downloaded. D) Almost all the top brands have a presence in at least one of the major app stores. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.5: Understanding the impact of mobile applications. 82) Which of the following is a programming language introduced by Apple specifically for developing iOS applications? A) Objective-C B) C C) C++ D) Swift Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 3.5: Understanding the impact of mobile applications. 83) Applications for Android operating system-based smartphones are typically written in which of the following? A) Swift B) Java C) ActiveX D) ColdFusion Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 3.5: Understanding the impact of mobile applications. 84) The only way apps can be purchased is via either the Apple App Store or from Google Play. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 3.5: Understanding the impact of mobile applications.

85) Discuss the implications of the app ecosystem for e-commerce. Answer: The implications of the app ecosystem for e-commerce are significant. The smartphone and tablet computer have become an always-present shopping tool, as well as an entirely new marketing and advertising platform for vendors. Early e-commerce applications using desktops and laptops were celebrated as allowing people to shop at home in their pajamas. Smartphones and tablets extend this range to far beyond the home. People can now shop anywhere, everywhere, and all the time, in between talking, texting, watching video, and listening to music. Almost all of the top 100 brands have a presence in at least one of the major app stores, and more than 90% have an app in the Apple App Store. M-commerce in the form of purchases of retail and travel products and services via a mobile device is expected to generate almost $500 billion in 2022 in the United States. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 3.5: Understanding the impact of mobile applications. E-commerce 2023, 17e (Laudon/Traver) Chapter 4 Building an E-commerce Presence: Websites, Mobile Sites, and Apps 1) Which of the following is a simple but powerful method for describing a firm's strengths and weaknesses? A) benchmarking B) SLDC C) SWOT analysis D) DevOps Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence. 2) The cost of hardware, software, and telecommunications services needed to build a website have ________ over the last decade. A) increased dramatically B) increased moderately C) decreased dramatically D) decreased slightly Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence. 3) Which of the following types of e-commerce presence is best suited for creating an ongoing conversation with one's customers? A) website B) e-mail C) social media D) offline media 69 Copyright © 2024 Pearson Education, Inc.

Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence.

4) In developing an e-commerce presence, what questions must be asked and answered about the firm's target audience? Answer: Without a clear understanding of a firm's target audience, it is difficult to develop a successful e-commerce presence. There are two primary questions: who is the target audience and where can they best be reached? A target audience can be described in several ways: demographics, behavior patterns (lifestyle), current consumption patterns (online vs. offline purchasing), digital usage patterns, content creation preferences (preferred social media venues), and buyer personas (profiles of your typical customers). Understanding the demographics of the firm's target audience is usually the first step. Demographic information includes age, income, gender, and location. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence. 5) What are the phases, activities, and milestones for developing an e-commerce presence for a typical start-up over a one-year period? Answer: A one-year e-commerce presence timeline might include the following phases, activities, and milestones. Phase 1/Planning, in which an e-commerce presence would be envisaged and personnel developed, with a milestone of creating a mission statement; Phase 2/Website development, in which content would be acquired, a site design developed, and hosting arranged for the site, with a milestone of creating a website plan; Phase 3/Web implementation, in which keywords and metatags would be developed, search engine optimization strategies identified and deployed, and potential sponsors identified, with a creation of a functional website as the milestone; Phase 4/Social media plan, in which appropriate social platforms and content for products and services would be identified, with the creation of a social media plan as the milestone; Phase 5/Social media implementation, in which a Facebook, Instagram, TikTok, Twitter, Pinterest and other social media presence would be developed, with a functioning social media presence as the milestone; and Phase 6/Mobile plan, in which a mobile plan would be developed with options for porting the website to the mobile platform considered, and with a mobile media plan as the relevant milestone. Phase 6/Mobile plan might also be the first phase for a firm that wanted to employ mobile first design. In addition, many small businesses begin first with a social media plan before developing a website. It is also important to note that it is possible to launch an e-commerce presence in a much shorter timeframe, by being pragmatic and launching with a more limited offering. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence.

6) Your e-commerce design company has received an RFP to help create an e-commerce presence for Tucci's, a renowned gourmet and specialty butcher that now wishes to sell its products online. Describe the elements you will include in your proposal to Tucci's. Answer: Student answers will vary, but should include the following: Elements that will be in the proposal include the (1) business goals, or vision, or mission statement, (2) identification of the target audience, (3) description of the marketspace, (4) a strategic analysis or SWOT analysis, (5) the content to be included, (6) a development timeline, and (7) a budget. Other recommendations that the student should mention include using social, local, and/or mobile marketing. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 4.1: Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence. 7) What are the two most important management challenges in building a successful e-commerce presence? A) developing a clear understanding of business objectives and knowing how to choose the right technology to achieve those objectives B) having an accurate understanding of your business environment and an achievable business plan C) building a team with the right skill sets and closely managing the development process D) identifying the key components of your business plan and selecting the right software, hardware, and infrastructure for your site Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 8) In order from beginning to end, the major steps in the SDLC are: A) systems analysis/planning; systems design; building the system; testing; and implementation. B) systems design; testing; building the system; and implementation. C) systems analysis/planning; systems design; building the system; implementation; and testing. D) systems analysis/planning; implementation; building the system; and testing. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

9) ________ are the types of information systems capabilities needed to meet business objectives. A) Information requirements B) System functionalities C) System design specifications D) Physical design specifications Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 10) Which of the following basic system functionalities is used to display goods on a website? A) product database B) digital catalog C) shopping cart system D) customer database system Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 11) Which system functionality must your website have to be able to personalize or customize a product for a client? A) an ad server B) a site tracking and reporting system C) an inventory management system D) customer on-site tracking Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 12) Which of the following are the two main components of a systems design? A) logical design and physical design B) behavioral design and technological design C) business objectives and technology requirements D) front-end systems and back-end systems Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

13) Which of the following helps you engage your customers in a conversation? A) shopping cart B) product database C) user forums D) site tracking and reporting system Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 14) Which of the following is a top-of-the-line prepackaged site-building tool? A) Wix B) Dreamweaver CC C) WordPress D) Sitecore Commerce Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 15) All of the following are basic information requirements for a product database except: A) product descriptions. B) stock numbers. C) customer ID numbers. D) inventory levels. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 16) Which of the following typically includes a data flow diagram to describe the flow of information for an e-commerce site? A) physical design B) logical design C) testing plan D) co-location plan Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

17) Which of the following details the actual hardware components to be used in a system? A) architecture plan B) system functionalities plan C) logical design D) physical design Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 18) Which of the following verifies that the business objectives of the system are in fact working? A) system testing B) acceptance testing C) unit testing D) implementation testing Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 19) Which of the following involves testing a site's program modules one at a time? A) system testing B) acceptance testing C) unit testing D) implementation testing Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 20) Most of the time required to maintain an e-commerce site is spent on: A) debugging code. B) responding to emergency situations. C) general administration and making changes and enhancements to the system. D) changes in reports, data files, and links to backend databases. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

21) All of the following are simple steps for optimizing web page content except: A) reducing unnecessary HTML comments. B) segmenting computer servers to perform dedicated functions. C) using more efficient graphics. D) avoiding unnecessary links to other pages on the site. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 22) Which of the following is the minimum system architecture requirement for an e-commerce website that processes orders? A) single-tier architecture B) two-tier architecture C) three-tier architecture D) multi-tier architecture Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 23) The concept of a "sprint" is related to which of the following development methodologies? A) prototyping B) Scrum C) component-based development D) DevOps Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 24) Which of the following involves creating a skeleton version that focuses on functionality rather than design? A) web services B) wireframing C) Scrum D) DevOps Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

25) Which of the following is the preferred method of implementing a service-oriented architecture? A) prototyping B) Scrum C) web services D) DevOps Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 26) Which form of testing compares a control page with one that is very different? A) template test B) new concept test C) funnel test D) system test Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 27) A template test is a form of which type of testing? A) unit testing B) system testing C) acceptance testing D) A/B testing Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 28) When using multivariate testing, if you wish to test three elements, such as an image, a button, and a piece of text, each with two different versions, how many combinations will you need to test? A) 2 B) 4 C) 6 D) 8 Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 77 Copyright © 2024 Pearson Education, Inc.

29) The process of comparing a website with that of its competitors in terms of response speed, quality of layout, and design is known as: A) split testing. B) funnel testing. C) benchmarking. D) system testing. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 30) The SDLC methodology helps developers to understand the business objectives of a system and design an appropriate solution. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 31) Scrum is a type of agile development. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 32) Using prebuilt templates is typically one of the most inexpensive options when building an e-commerce site. Answer: TRUE Difficulty: Easy AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 33) In general, the annual system maintenance cost will roughly parallel the development cost. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

34) A multi-tier architecture includes a web and database server. Answer: FALSE Difficulty: Difficult AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 35) Microservices are a very granular implementation of SOA. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence. 36) What are web services and how are they used? Answer: Web services are loosely coupled, reusable software components that use Extensible Markup Language (XML) and other open protocols and standards to enable one application to communicate with another via an application programming interface (API) without requiring any custom programming to share data and services. In addition to supporting internal and external integration of systems, web services can be used as tools for building new information system applications or enhancing existing systems. Because these software services use a universal set of standards, they can be less expensive and less difficult to weave together than proprietary components. Web services can perform certain functions on their own and can also engage other web services to complete more complex transactions, such as checking credit, procuring products, or ordering products. By creating software components that can communicate and share data regardless of the operating system, programming language, or client device, web services can provide significant cost savings in systems building while opening up new opportunities for collaboration with other companies. Web services are the preferred method of implementing a service-oriented architecture (SOA), a style of software design that employs a set of self-contained services that communicate with each other to create a working software application. SOA allows for the reuse of existing assets, enabling the creation of new services from an existing IT infrastructure of systems, as well as interoperability, which permits different web services to run on a variety of software platforms and hardware architectures. Microservices are a very granular implementation of SOA in which an application is decomposed into a number of smaller services, each responsible for a discrete task that can communicate with other services to solve a larger, complex business problem. A key advantage of a microservices focus is that they can be built and deployed independently, making it easier to isolate errors specific to the service as well as scale them independently of the applications that use them. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 4.2: Explain the process that should be followed in building an e-commerce presence.

37) All of the following might be part of a website's middle-tier layer except: A) a database server. B) an ad server. C) legacy corporate applications. D) a mail server. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 38) The leading web server software is: A) Apache. B) Microsoft Internet Information Server. C) Unix. D) Linux. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 39) All of the following are basic functionality provided by web servers except: A) site management tools. B) data capture tools. C) security services. D) a shopping cart. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 40) Which of the following would you use to verify that links on web pages are valid? A) HTTP B) FTP C) data capture tools D) site management tools Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software.

41) All of the following are examples of an open-source web content management system (WCMS) except: A) Joomla. B) Drupal. C) Dreamweaver CC. D) WordPress. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 42) Advantages of dynamic page generation include all of the following except: A) lowered menu costs. B) market segmentation. C) nearly cost-free price discrimination. D) client-side execution of programming. Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 43) Which of the following cannot be used to retrieve objects from a database? A) Node.js B) ASP.NET C) JSP D) HTML Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 44) All of the following are open-source programming or scripting languages except: A) PHP B) Django C) Python D) ColdFusion Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software.

45) Which of the following technologies is used to separate the design and presentation of content from the content creation process? A) SOA B) proxy server C) shopping cart D) WCMS Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 46) MySQL is which of the following? A) open-source database software B) scripting language embedded in HTML documents C) web server software D) website analytics software Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 47) All of the following are basic functionality provided by e-commerce merchant server software except: A) a product catalog. B) marketing analytics. C) a shopping cart. D) credit card processing. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 48) ________ are a kind of middleware software that provides the glue connecting traditional corporate systems to the customer as well as all the functionality needed to conduct e-commerce. A) Application servers B) Web page servers C) Database servers D) Content management servers Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 82 Copyright © 2024 Pearson Education, Inc.

49) Which of the following is a standard that makes it possible to access data from any application regardless of the database and operating system software being used? A) CGI B) ODBC C) MySQL D) HTTP Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 50) The web server software used has a significant impact on how a website's web pages look on a user's computer. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 51) DHMTL is used to generate dynamic web pages. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 52) Dynamic page generation enables price discrimination. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 53) Objects can be retrieved from a database using Java Server Pages. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software.

54) Explain the main functionalities included in e-commerce merchant server software. Answer: E-commerce merchant server software (also called an e-commerce software platform) offers an integrated environment that promise to provide most or all of the functionality and capabilities needed to develop a sophisticated, customer-centric site. Important elements of such software are an online catalog, an online shopping cart, and online credit card processing. An online catalog lists the products available on a website. E-commerce merchant server software typically includes a database capability that will allow for construction of a customized online catalog. The complexity and sophistication of the catalog will vary depending on the size of the company and its product lines. An online shopping cart enables customers to set aside items they wish to purchase in preparation for checkout. Online shopping cart capabilities include the ability for consumers to select merchandise, review the items they have selected, and delete or edit their selection as necessary. Finally, the customer must be able to click a button to begin the order processing system. The software automatically stores shopping cart data. Credit card processing works in conjunction with the shopping cart so that the customer's credit card can be verified, the charge can be debited to the card, and a credit to the firm's account can be made. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 4.3: Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software. 55) The term stateless refers to the fact that: A) no one government entity controls the Internet. B) the server does not have to maintain an ongoing dedicated interaction with the client computer. C) system performance degrades as more simultaneous users require service. D) web servers may maintain multiple instances of server software to handle requests. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 56) Which of the following types of sites typically require a high percentage of secure pages? A) web services B) customer self-service C) trading D) publishing/subscription Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site.

57) Which of the following is not a main factor in determining the overall demand on an e-commerce site? A) file sizes of web pages being served B) number of simultaneous users in peak periods C) speed of legacy applications that are needed to supply data to web pages D) whether content is dynamic or static Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 58) All of the following are steps one can take to right-size a website's hardware platform and meet demands for service except: A) scaling hardware vertically. B) scaling hardware horizontally. C) replacing static pages with dynamically generated pages. D) improving processing architecture. Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 59) All of the following are methods of improving the processing architecture of a website except: A) separating static content from dynamic content. B) optimizing ASP code. C) optimizing the database schema. D) adding web servers. Answer: D Difficulty: Difficult AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 60) Upgrading a server from a single processor to multiple processors is an example of scaling a site vertically. Answer: TRUE Difficulty: Difficult AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site.

61) Storing HTML pages in RAM rather than on a server's hard drive is an expensive way to fine-tune the processing architecture of a website. Answer: FALSE Difficulty: Difficult AACSB: Information technology Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 62) Discuss the options available to handle increasing demand on a website and the advantages and disadvantages of each option. Answer: There are three basic options to enhance a website's ability to meet increasing demand. A site can be scaled vertically by upgrading the servers from single processor to multiple processors. The drawbacks are that this can become expensive with each growth cycle and that the site becomes overly dependent on just a small number of powerful machines. A site can also be scaled horizontally by adding multiple single processor servers and balancing the load among many servers. Scaling horizontally can be less expensive since older PCs that would otherwise be discarded can be used. However, this approach requires special load-balancing software. The main drawbacks of scaling horizontally are that the size of the physical facility will have to increase, and that there is added management complexity. Perhaps the best method for meeting increased demands for service on a site is to improve the processing architecture of the site by splitting the workload up into I/O-intensive and CPU-intensive operations. The site's servers can then be fine-tuned to handle each type of workload. RAM can be added to servers that will store the HTML pages, reducing the load on the hard drives, and CPU-intensive activities can be moved to high-end multiple processor servers that are dedicated to handling a particular task, such as order processing and accessing the necessary databases. These steps will enable he number of servers required to handle peak demand to be reduced. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 4.4: Understand the issues involved in choosing the most appropriate hardware for an e-commerce site. 63) Django is based on which of the following? A) PHP B) Python C) Perl D) Ruby on Rails Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance.

64) Ruby on Rails is based on which of the following philosophies? A) SLDC B) CoC C) LAMP D) Ajax Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 65) Which of the following is the most commonly used server-side scripting language? A) Ruby on Rails B) Django C) PHP D) Perl Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 66) All of the following are website design features that annoy customers except: A) slow-loading pages. B) pop-under ads. C) splash pages. D) multi-browser functionality. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.5: Identify additional tools that can improve website performance. 67) All of the following are important factors in search engine optimization except: A) selecting keywords and page titles. B) encouraging other sites to link to your site. C) buying search engine ads. D) adhering to privacy policies. Answer: D Difficulty: Easy AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance.

68) ________ scripts have become obsolete, due to security and other concerns, and have been replaced by more modern and secure methods. A) CGI B) ColdFusion C) JavaScript D) ASP.NET Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 69) ________ is a programming language invented by Netscape used to control the objects on an HTML page and handle interactions with the browser. A) Python B) ASP C) ColdFusion D) JavaScript Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 70) The primary way a website is able to personalize the content presented to a visitor is through the use of: A) privacy policies. B) cookies. C) accessibility rules. D) site management tools. Answer: B Difficulty: Easy AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 71) Which of the following is not part of the LAMP open-source web development model? A) Linux B) Apache C) Microsoft IIS D) PHP Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance.

72) Django follows the ________ programming principle. A) CoC B) WYSIWYG C) DRY D) LAMP Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 73) The current versions of most web browsers no longer support Java applets. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.5: Identify additional tools that can improve website performance. 74) What are widgets and how are they used? How do they differ from mashups? Answer: A widget is a small, prebuilt chunk of code that executes automatically in an HTML web page to perform a specific task. Many are free. Social networks and blogs use widgets to present users with content drawn from around the Web including news headlines, announcements, press releases, calendars, clocks, weather, live TV, games, and other functionality. Mashups are a little more complicated and involve pulling functionality and data from one program and including it in another. The most common mashup involves using Google Maps data and software and combining it with other data. Difficulty: Easy AACSB: Information technology; Written and oral communication Learning Objective: 4.5: Identify additional tools that can improve website performance. 75) List and briefly describe the eight most important factors in successful e-commerce site design. Answer: The eight most important factors in successful e-commerce site design include functionality (pages that work, load quickly, and point the customer toward product offerings); being informational (including links that customers can easily find to discover more about the firm and its products); ease of use (simple foolproof navigation); providing redundant navigation (alternative navigation to the same content); ease of purchase (one or two clicks to purchase); multi-browser functionality (site works with most popular browsers); simple graphics (avoiding distracting graphics and sounds that the user cannot control); and legible text (avoiding backgrounds that distort text or make it illegible). Difficulty: Moderate AACSB: Information technology; Written and oral communication Learning Objective: 4.5: Identify additional tools that can improve website performance.

76) What is JavaScript and how is it used to create interactivity on a website? Answer: JavaScript is a programming language invented by Netscape that is used to control objects on HTML pages as well as the interactions with the browser. It is most commonly used on the client side to handle verification and validation of user input, as well as to implement business logic. For instance, JavaScript can be used on customer registration forms to confirm that a valid phone number, zip code, or e-mail address has been given. Before a user finishes completing a form, the e-mail address given can be tested for validity. It is much more acceptable to corporations because it is more stable than Java and it is restricted to the operation of requested web pages. JavaScript is also used as part of Node.js, a cross-platform environment for server-side applications (including mobile). Node.js has become one of the most popular server-side developer frameworks, resulting in JavaScript remaining a vital language not just for web development, but also for platform-as-a-service (PaaS). Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication Learning Objective: 4.5: Identify additional tools that can improve website performance. 77) All of the following are key design principles of responsive web design except: A) flexible grid-based layouts. B) media queries. C) coding by convention. D) flexible images and media. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 78) Which of the following is a server-side technique that detects the attributes of the device making the request, and using predefined templates, loads a version of a site optimized for the device? A) LAMP B) AWD C) mobile first design D) RoR Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications.

79) Which of the following statements about RWD is not true? A) RWD works best for sites that have complex functionality. B) RWD tools include HTML5 and CSS3. C) RWD makes it possible to design a website that automatically adjusts its layout and display according to the screen resolution of the device on which it is being viewed. D) RWD can be costly. Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 80) Building which of the following is the least expensive path to creating a mobile presence? A) native app B) mobile website C) mobile web app D) hybrid HTTP Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 81) Which of the following statements about mobile websites is not true? A) Mobile websites run on a firm's servers, just like a traditional website. B) Mobile websites can be built using standard web tools such as server-side HTML, Linux, PHP and SQL. C) Generally, mobile websites operate more quickly than traditional websites viewed on a desktop computer connected to a broadband office network. D) Most large firms today have mobile websites. Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 82) Beginning the e-commerce development process with a mobile presence rather than a desktop website is referred to as which of the following? A) RWD B) AWD C) mobile first design D) RESS Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 91 Copyright © 2024 Pearson Education, Inc.

83) An HTML5 app is one designed to specifically operate using a mobile device's hardware and operating system. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 84) Native web apps need to be developed for different mobile platforms. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. 85) Discuss some of the unique features that must be considered when designing a mobile web presence. Answer: Designing a mobile web presence is somewhat different from designing a website that will be accessed via a traditional desktop computer. For instance, mobile hardware is smaller, and there are more resource constraints on data storage and processing power. The mobile platform is also constrained by slower connection speeds than provided by traditional desktop computers. As a result, file sizes should be kept smaller, and the number of files sent to the user reduced. Mobile displays are much smaller and require simplification, and some screens are not as easily visible in sunlight. Touch screen technology also introduces new interaction routines that are different from the traditional mouse and keyboard. The mobile platform is not as easy to use as a data entry tool, and therefore choice boxes and lists should be used more frequently so that the user can easily scroll and touch-select options, rather than type them in. You will also want to determine whether to create a mobile-friendly version of your e-commerce site or implement responsive web design or adaptive web design, or create an entirely new mobile app. You can choose to build a mobile web app, a native app, or a hybrid app. Building a mobile web app that uses the mobile device's browser requires more effort and cost than developing a mobile website, suffers from the same limitations as any browser-based application, but does offer some advantages such as better graphics, more interactivity, and faster local calculations. Building a native app, which is programmed for specific mobile operating systems, requires much more programming; however, it will allow you much greater creative rein in making a unique customer experience. You can also choose to create a hybrid, cross-platform mobile app with various low-cost or open-source app development toolkits. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 4.6: Understand the important considerations involved in developing a mobile website and building mobile applications. E-commerce 2023, 17e (Laudon/Traver) Chapter 5 E-commerce Security and Payment Systems 1) Confidentiality is sometimes confused with: A) privacy. 92 Copyright © 2024 Pearson Education, Inc.

B) authenticity. C) integrity. D) nonrepudiation. Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 2) ________ refers to the ability to ensure that e-commerce participants do not deny their online actions. A) Nonrepudiation B) Authenticity C) Availability D) Integrity Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 3) ________ refers to the ability to identify the person or entity with whom you are dealing on the Internet. A) Nonrepudiation B) Authenticity C) Availability D) Integrity Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values.

4) Which of the following is an example of a violation of integrity with respect to e-commerce security? A) A website is not actually operated by the entity the customer believes it to be. B) A merchant uses customer information in a manner not intended by the customer. C) A customer denies that he is the person who placed the order. D) An unauthorized person intercepts an online communication and changes its contents. Answer: D Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 5) ________ refers to the ability to ensure that an e-commerce site continues to function as intended. A) Nonrepudiation B) Authenticity C) Availability D) Integrity Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 6) Which of the following is an example of a violation of your online privacy? A) your e-mail being read by a hacker B) your online purchasing history being sold to other merchants without your consent C) your computer being used as part of a botnet D) your e-mail being altered by a hacker Answer: B Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 7) ________ refers to the ability to ensure that messages and data are only available to those authorized to view them. A) Confidentiality B) Integrity C) Privacy D) Availability Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 94 Copyright © 2024 Pearson Education, Inc.

8) Which of the following is not a key factor for establishing e-commerce security? A) data integrity B) technology C) organizational policies D) laws and industry standards Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 9) According to IBM/Ponemon Institute's 2021 Cost of a Data Breach survey, the total average cost of a data breach among the 537 companies surveyed globally was: A) $2.4 million B) $4.2 million C) $24 million D) $42 million Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 10) Typically, the more security measures added to an e-commerce site, the slower and more difficult it becomes to use. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values. 11) Why is it difficult to accurately estimate the actual amount of cybercrime? Answer: It is difficult to accurately estimate the actual amount of cybercrime, in part, because many companies are hesitant to report it due to the fear of losing the trust of their customers, and because even if crime is reported, it may be difficult to quantify the actual dollar amount of the loss. Difficulty: Easy AACSB: Analytical thinking; Written and oral communication Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the key dimensions of e-commerce security, and the tension between security and other values.

12) Which of the following statements about data breaches, as reported by the Identity Theft Resource Center, is not true? A) The number of data breaches and exposures in 2021 increased by almost 70% from 2020. B) More than 293 million people were impacted by data breaches in 2021. C) Employee error was the leading cause of data breaches in 2021. D) More than 80% of data breaches in 2021 involved sensitive records, such as names and full social security numbers. Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 13) Which of the following is a brute force attack which hackers launch via botnets and automated tools using known username and password combinations? A) credential stuffing B) phishing C) pharming D) MitM attack Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 14) Which of the following did the Internet Advertising Bureau urge advertisers to abandon? A) HTML B) HTML5 C) Adobe Flash D) Adobe Acrobat Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 15) Accessing data without authorization on Dropbox is an example of a: A) social network security issue. B) cloud security issue. C) mobile platform security issue. D) sniffing issue. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

16) Conficker is an example of a: A) virus. B) worm. C) Trojan horse. D) botnet. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 17) Which of the following companies was the target of what is believed to be the largest breach at a single company in history? A) Equifax B) Facebook C) Yahoo D) T-Mobile Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 18) Software that is used to obtain private user information such as a user's keystrokes or copies of e-mail is referred to as: A) spyware. B) a backdoor. C) a browser parasite. D) adware. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 19) Which of the following technologies is aimed at reducing e-mail address spoofing and phishing? A) TLS B) WPA C) DMARC D) MFA Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

20) What is the most frequent cause of stolen credit cards and card information today? A) lost cards B) the systematic hacking and looting of corporate servers storing credit card information C) sniffing programs D) phishing attacks Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 21) Which dimensions of security is spoofing a threat to? A) integrity and confidentiality B) availability and authenticity C) integrity and authenticity D) availability and integrity Answer: C Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 22) Which of the following is not an example of malicious code? A) ransomware B) Trojan horse C) bot networks D) sniffer Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 23) The attack against Dyn servers is an example of a(n): A) SQLi attack. B) browser parasite. C) DDoS attack. D) MitM attack. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

24) Mirai is an example of which of the following? A) worm B) botnet C) phishing D) hacktivism Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 25) Malware that comes with a downloaded file requested by a user is called a: A) Trojan horse. B) backdoor. C) drive-by download. D) PUP. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 26) A browser parasite is an example of which of the following? A) sniffer B) worm C) PUP D) virus Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 27) "Carpet-bombing" is an example of which of the following types of attacks? A) DDoS B) phishing C) SQL injection D) ransomware Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

28) Automatically redirecting a web link to a different address is an example of which of the following? A) sniffing B) social engineering C) pharming D) DDoS attack Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 29) Which of the following types of attacks resulted in a data breach at the online trading firm Robinhood that exposed the data of 6 million customers? A) DDoS attack B) ransomware C) social engineering D) sniffing Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 30) ________ typically attack governments, organizations, and sometimes individuals for political purposes. A) Crackers B) Tiger teams C) Bounty hunters D) Hacktivists Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 31) A Trojan horse appears to be benign, but then does something other than expected. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 32) Phishing attacks rely on browser parasites. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

33) WannaCry is an example of ransomware. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 34) Spoofing is the attempt to hide a hacker's true identity by using someone else's e-mail or IP address. Answer: TRUE Difficulty: Difficult AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 35) Exploit kits can be purchased by users to protect their computers from malware. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 36) A drive-by download is malware that comes with a downloaded file that a user intentionally or unintentionally requests. Answer: TRUE Difficulty: Difficult AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 37) Log4Shell is an example of a software vulnerability. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 38) What security issues does the metaverse raise? Answer: Malware is likely to be targeted at the metaverse as the metaverse is further developed. The hardware needed for virtual reality and augmented reality platforms will create new endpoints that hackers will seek to exploit. Attackers could potentially manipulate platforms to create physical dangers. Participants in the metaverse may also be subject to various forms of harassment by malicious actors. Identities can be stolen, as can digital currencies that are used to pay for goods and services. All of the security issues currently being experienced with today's Internet are likely to continue to persist in the metaverse. The privacy of participants and the security of their personal information are also concerns. These issues are particularly acute because metaverse companies may track and retain user biometric data, as well as data about users' actual actions, and ultimately may be able to learn how users uniquely think and act. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 101 Copyright © 2024 Pearson Education, Inc.

39) Why does the majority of mobile malware still target Android devices? Answer: Android devices are much more likely to be infected with malware compared to iOS devices. This is due in part to the fact that Android users can download apps from third-party stores that are poorly regulated, whereas Apple users are confined to the more tightly controlled App Store. Google uses an automated screening technique called Google Play Protect to detect malicious apps and wipe them from the Google Play store. Google can also perform a remote wipe of offending apps from Android phones without user intervention. Google also re-architected the Android operating system to separate hardware-specific code from the rest of Android, allowing Google to patch vulnerabilities and other security issues more quickly. Still, this only helps users get rid of malware faster; it can't stop Android phones from being infected. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.2: Identify the key security threats in the e-commerce environment. 40) List and briefly describe the various types of malicious code and how they work. Include the different types of viruses. Answer: Malicious code includes a variety of threats such as viruses, worms, ransomware, Trojan horses, and bot programs. A virus is a computer program that can replicate or make copies of itself and spread to other files. In addition to the ability to replicate, most computer viruses deliver a "payload." The payload may be relatively benign, such as the display of a message or image, or it may be highly destructive–destroying files, reformatting the computer's hard drive, or causing programs to run improperly. Worms are designed to spread not only from file to file but from computer to computer and do not necessarily need to be activated in order to replicate. Ransomware is a type of malware (often a worm) that blocks or limits access to a computer or network by encrypting files and then demanding a ransom payment, typically in a cryptocurrency such as Bitcoin, in exchange for the decryption key. If the victim does not comply within the time allowed, the files will never be able to be decrypted. A Trojan horse is not itself a virus because it does not replicate but it is a method by which viruses or other malicious code can be introduced into a computer system. It appears benign and then suddenly does something harmful. For example, it may appear to be only a game and then it will steal passwords and mail them to another person. A backdoor is a malware feature that allows attackers to covertly access a compromised computer or network. Bot programs are a type of malicious code that can be covertly installed on a computer when it is attached to the Internet. Once installed, the bot responds to external commands sent by the attacker, and many bots can be coordinated by a hacker into a botnet. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.

41) Next generation firewalls provide all of the following except: A) an application-centric approach to firewall control. B) the ability to identify applications regardless of the port, protocol, or security evasion tools used. C) the ability to automatically update applications on a client computer with security patches. D) the ability to identify users regardless of the device or IP address. Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 42) Asymmetric key cryptography is also known as: A) public key cryptography. B) secret key cryptography. C) PGP. D) PKI. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 43) All the following statements about symmetric key cryptography are true except: A) in symmetric key cryptography, both the sender and the receiver use the same key to encrypt and decrypt a message. B) The Data Encryption Standard is the most widely used symmetric key encryption system. C) There are symmetric key systems that have keys up to 2,048 bits. D) symmetric key cryptography is still part of Internet cryptography. Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 44) The Advanced Encryption Standard offers all of the following key sizes except: A) 56 B) 128 C) 192 D) 256 Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

45) All of the following statements about public key cryptography are true except: A) public key cryptography uses two mathematically related digital keys. B) public key cryptography ensures authentication of the sender. C) public key cryptography does not ensure message integrity. D) public key cryptography is based on the idea of irreversible mathematical functions. Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 46) All of the following are features of WPA3 except: A) it implements a more robust key exchange protocol. B) it enables the creation of a VPN. C) it provides a more secure way to connect IoT devices. D) it features expanded encryption for public networks. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 47) All of the following statements about PKI are true except: A) the term PKI refers to the certification authorities and digital certificate procedures that are accepted by all parties. B) PKI is not effective against insiders who have legitimate access to corporate systems including customer information. C) PKI guarantees that the verifying computer of the merchant is secure. D) the acronym PKI stands for public key infrastructure. Answer: C Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 48) A digital certificate contains all of the following except the: A) subject's private key. B) subject's public key. C) digital signature of the certification authority. D) digital certificate serial number. Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

49) Which of the following dimensions of e-commerce security is not provided for by encryption? A) confidentiality B) availability C) message integrity D) nonrepudiation Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 50) All of the following are methods of securing channels of communication except: A) TLS. B) digital certificates. C) VPN. D) FTP. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 51) A ________ is hardware or software that acts as a filter to prevent unwanted packets from entering a network. A) firewall B) virtual private network C) proxy server D) PPTP Answer: A Difficulty: Easy AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 52) Proxy servers are also known as ________ because they have two network interfaces. A) firewalls B) application gateways C) dual home systems D) packet filters Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

53) All of the following are used for authentication except: A) digital signatures. B) certificates of authority. C) biometric devices. D) packet filters. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 54) An intrusion detection system can perform all of the following functions except: A) examining network traffic. B) setting off an alarm when suspicious activity is detected. C) checking network traffic to see if it matches certain patterns or preconfigured rules. D) blocking suspicious activity. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 55) Which of the following statements is not true? A) A VPN provides both confidentiality and integrity. B) A VPN uses both authentication and encryption. C) A VPN uses a dedicated secure line. D) The primary use of VPNs is to establish secure communications among business partners. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 56) Which of the following is the most common protocol for securing a digital channel of communication? A) DES B) TLS C) VPN D) HTTP Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

57) Most computers and mobile devices today have built-in encryption software that users can enable. Answer: TRUE Difficulty: Difficult AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients. 58) The easiest and least expensive way to prevent threats to system integrity is to install anti-virus software. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

59) Explain the difference between symmetric key cryptography and public key cryptography. Which dimensions of e-commerce security does encryption address? Answer: Symmetric key cryptography (secret key cryptography) involves the use of a secret cipher or key that transforms plain text into cipher text. Both the sender and the receiver use the same key to encrypt and decrypt the message. The possibilities for simple substitution and transposition ciphers are endless, but they all suffer from common flaws. First, in the digital age, computers are so powerful and fast that these types of encryption can be broken quickly. Second, symmetric key cryptography requires that both parties share the same key. To share the same key, they must send the key over a presumably insecure medium, where it could be stolen and used to decipher messages. If the secret key is lost or stolen, the entire encryption system fails. Third, in commercial use, a secret key would be needed for each of the parties involved in a transaction. In a population of millions of Internet users, thousands of millions of keys would be needed to accommodate all e-commerce customers (estimated at about 215 million in the United States). Potentially, 215² million different keys would be needed. Clearly, this situation would be too unwieldy to work in practice. Public key cryptography (also referred to as asymmetric cryptography) solves the problem of exchanging keys. In this method, two mathematically related digital keys are used: a public key and a private key. The private key is kept secret by the owner, and the public key is widely disseminated. Both keys can be used to encrypt and decrypt a message. However, once the keys are used to encrypt a message, the same key cannot be used to unencrypt the message. The mathematical algorithms used to produce the keys are one-way functions. A one-way, irreversible mathematical function is one in which, once the algorithm is applied, the input cannot be subsequently derived from the output. Public key cryptography is based on the idea of irreversible mathematical functions. The keys are sufficiently long (128, 256, and 512 bits) that it would take enormous computing power to derive one key from the other using the largest and fastest computers available. Encryption can provide four of the six key dimensions of e-commerce security. It can provide assurance that the message has not been altered (integrity), prevent users from denying that they sent the message (nonrepudiation), provide verification of the identity of the person or computer sending the message (authentication), and give assurance that the message has not been read by others (confidentiality). Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

60) What dimensions do digital signatures and hash digests add to public key cryptography and how do they work? Answer: Digital signatures and hash digests can add authentication, nonrepudiation, and integrity when used with public key encryption. Encryption technology also allows for digital signatures and authentication. The sender encrypts the message yet again using their private key to produce a digital signature. To check the confidentiality of a message and ensure it has not been altered in transit, a hash function is used first to create a digest of the message. A hash function is an algorithm that produces a fixed-length number called a hash or message digest. To ensure the authenticity of the message and to ensure nonrepudiation, the sender encrypts the entire block of cipher text one more time using the sender's private key. This produces a digital signature or "signed" cipher text. The result of this double encryption is sent over the Internet to the recipient. Then, the recipient first uses the sender's public key to authenticate the message. Once authenticated, the recipient uses his or her private key to obtain the hash result and original message. As a final step, the recipient applies the same hash function to the original text and compares the result with the result sent by the sender. If the results are the same, the recipient now knows the message has not been changed during transmission. The message has integrity. Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

61) Discuss the security of communications channels. Include definitions and explanations for the terms Secure Sockets Layer (SSL), Transport Layer Security (TLS), secure negotiated session, session key, HTTPS, and VPN. Answer: Secure Sockets Layer was the original protocol enabling securing communications over the Internet. Today it has been replaced by the Transport Layer Security Protocol (TLS), which is an updated, more secure version of SSL. When you receive a message from a web server then you will be communicating through a secure channel; this means that TLS will be used to establish a secure negotiated session. A secure negotiated session is a client-server session in which the URL of the requested document, its contents, and the contents of the forms filled out by the user on the page, as well as the cookies that are exchanged, are all encrypted. The browser and the server exchange digital certificates with one another, determine the strongest shared form of encryption, and begin communicating using a unique symmetric encryption key, agreed upon for just this encounter. This is called a session key. TLS provides data encryption, server authentication, optional client authentication, and message integrity for the TCP/IP connections between two computers. TLS addresses the threat of authenticity by allowing users to verify another user's identity or the identity of a server. It also protects the integrity of the messages exchanged. However, once the merchant receives the encrypted credit and order information, that information is typically stored in an unencrypted format on the merchant's servers. While /TLS provides secure transactions between merchant and consumer, it only guarantees server-side authentication. Client authentication is optional. In addition, TLS cannot provide irrefutability – consumers can order goods or download information products and then claim the transaction never occurred. TLS is used in conjunction with HTTPS, a secure version of the HTTP protocol that uses TLS for encryption and authentication. It is implemented by a server adopting the HTTP Strict Transport Security (HSTS) feature, which forces browsers to only access the server using HTTPS. Virtual private networks (VPNs) enable remote users to access an internal network from the Internet. They use protocols to create a private connection between a user on a local ISP and a private network. This process is called tunneling because it creates a private connection by adding an encrypted wrapper around the message to hide its content. It is called virtual because it appears to be a dedicated secure line when in fact it is a temporary secure line. Using the Internet and VPN as the connection method significantly reduces the cost of secure communications. The use of VPNs has skyrocketed as a result of the tremendous increase in the number of people working remotely. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 5.3: Describe how technology helps secure Internet communications channels and protect networks, servers, and clients.

62) What is the first step in developing an e-commerce security plan? A) Create a security organization. B) Develop a security policy. C) Perform a risk assessment. D) Perform a security audit. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 63) To allow lower-level employees access to the corporate network while preventing them from accessing private human resources documents, you would use: A) a firewall. B) an authorization management system. C) security tokens. D) an authorization policy. Answer: B Difficulty: Easy AACSB: Information technology Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 64) Which of the following is not an example of an access control? A) firewalls B) proxy servers C) digital signatures D) login passwords Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 65) Which of the following statements is not true? A) Apple's Touch ID stores a digital replica of a user's actual fingerprint in Apple's iCloud. B) Biometric devices reduce the opportunity for spoofing. C) A retina scan is an example of a biometric device. D) Biometric data stored on an iPhone is encrypted. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security.

66) Face ID is an example of which of the following? A) biometrics B) encryption C) IDS D) firewall Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 67) Which of the following statements is not true? A) A majority of states require companies that maintain personal data on their residents to publicly disclose when a security breach affecting those residents has occurred. B) The Patriot Act broadly expanded law enforcement's investigative and surveillance powers. C) The Cybersecurity Information Sharing Act was strongly supported by most large technology companies and privacy advocates. D) The Federal Trade Commission has asserted that it has authority over corporations' data security practices. Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 68) Zero trust is a cybersecurity framework based on the principle of maintaining strict access controls and not trusting anyone or anything by default, even those behind a corporate firewall. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security.

69) How do multi-factor authentication tools provide security? Answer: Multi-factor authentication (MFA) tools require users to have multiple credentials to verify their identity. Authentication credentials might include something the user knows, such as a password; something the user possesses, such as a smartphone or YUBIkey USB device; and something that the user "is", such as a physical characteristic. Two-factor authentication (2FA) is a subset of MFA that requires two credentials. Many MFA systems use mobile phones and involve either texting a one-time dynamic secure passcode to the phone or pushing an authentication request to an app on the phone that the user can confirm via a built-in biometric authenticator, such as TouchID. However, MFA tools can still be compromised, using malware such as Trickbot, which can intercept the one-time codes sent by an app, by phishing attacks, as well as by other methods. Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating security. 70) Which of the following statements about blockchain is not true? A) A blockchain system is composed of a distributed network of computers. B) A blockchain system is inherently centralized. C) A blockchain system is a transaction processing system. D) Cryptocurrencies are based on blockchain technology. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 71) All of the following statements about Apple Pay are true except which of the following? A) Apple Pay is the most popular alternative payment method in the United States. B) Apple Pay is an example of a universal proximity mobile wallet. C) Apple Pay can be used for mobile payments at the point of sale at a physical store. D) Apple Pay has more users in the United States than either Google Pay or Samsung Pay. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 72) PayPal is an example of which of the following types of payment system? A) online stored value payment system B) PCI-DSS C) BNPL service D) branded proximity mobile wallet Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today.

73) PCI-DSS is a standard established by which of the following? A) the banking industry B) the credit card industry C) the federal government D) the retail industry Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 74) Which of the following is not a major trend in e-commerce payments in 2022-2023? A) Online payment volume surges due to the Covid-19 pandemic. B) PayPal remains the most popular alternative payment method. C) Large banks enter the mobile wallet and P2P payments market. D) Payment by credit and/or debit card is no longer the dominant form of online payment. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 75) All of the following are limitations of the existing online credit card payment system except: A) poor security. B) costs for consumers. C) costs for merchants. D) social equity. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 76) Which of the following statements about Bitcoin is not true? A) The computational power required to mine Bitcoins has increased over time. B) Bitcoins are completely secure. C) Bitcoins are illegal in some countries. D) Bitcoin mining uses more energy than the entire amount consumed by Switzerland. Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today.

77) Which of the following is a set of short-range wireless technologies used to share information among devices within about two inches of each other? A) DES B) NFC C) IM D) text messaging Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 78) All of the following are examples of cryptocurrencies except: A) Ethereum. B) Ripple. C) Zelle. D) Tether. Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 79) Which of the following is not a universal proximity wallet app? A) Apple Pay B) Google Pay C) Square Cash D) Samsung Pay Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 80) Zelle is an example of a P2P mobile payment app. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 81) Bluetooth is the primary enabling technology for mobile wallets. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today.

82) There is a finite number of Bitcoins that can be created. Answer: TRUE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 83) QR code technology is the primary enabling technology for universal proximity wallets. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. 84) Briefly describe the three primary types of mobile wallet apps and identify the examples of each type. Answer: There are three primary types of mobile wallet apps: universal proximity wallets, branded store proximity wallets, and P2P apps. Universal proximity mobile wallets, such as Apple Pay, Google Pay, and Samsung Pay, that can be used at a variety of merchants for point-of-sale transactions if the merchant supports that service (e.g., has an Apple merchant app and can accept such payments), are the most-well known and common type. Branded store proximity mobile wallets are mobile apps that can be used only at a single merchant. For instance, Walmart, Target, Starbucks, and Dunkin all have very successful mobile wallet apps. P2P mobile payment apps, such as Venmo, Zelle, and Square Cash, are used for payments among individuals who have the same app. Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication Learning Objective: 5.5: Identify the major e-commerce payment systems in use today.

85) Discuss the limitations of the existing credit card payment system for online transactions. Answer: There are a number of limitations to the existing credit card payment system. The most important limitations involve security, merchant risk, administrative and transaction costs, and social equity. The existing system offers poor security. Neither the merchant nor the consumer can be fully authenticated. The merchant could be a criminal organization designed to collect credit card numbers, and the consumer could be a thief using stolen or fraudulent cards. The risk facing merchants is high. Consumers can repudiate charges even though the goods have been shipped or the product downloaded. Credit card companies have introduced EMV cards (cards with a computer chip) to reduce credit card fraud. The chip stores account data and generates a unique transaction code for each use. The use of EMV cards has significantly reduced credit card fraud for in-store purchases (known as card-present [CP] fraud). But criminals have intensified their focus on card-not-present (CNP) fraud, which comprises an ever-increasing share of the losses due to credit card fraud. The administrative costs for merchants of setting up an online credit card system and becoming authorized to accept credit cards are high. Transaction costs for merchants also are significant–roughly 3% of the purchase plus a transaction fee of 20—35 cents per transaction, plus other setup fees. Also, credit cards are not very democratic even though they seem ubiquitous. Millions of young adults do not have credit cards, along with almost 100 million other adult Americans who cannot afford cards or who are considered poor risks because of their low incomes. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 5.5: Identify the major e-commerce payment systems in use today. E-commerce 2023, 17e (Laudon/Traver) Chapter 6 E-commerce Marketing and Advertising Concepts 1) Which of the following statements about Internet usage in the United States is not true? A) In 2022, around 300 million people of all ages had access to the Internet. B) In 2022, the growth in the number of new online users was around 1%. C) More than 90% of all U.S. Internet users access the Internet using a mobile device. D) Owners of mobile devices spend about eight and a quarter hours a day using them for non-telephone activities such as viewing videos, visiting social networks, and playing games. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 2) Which of the following is not one of the main stages of the online purchasing process? A) post-purchase service and loyalty B) awareness C) engagement D) conversation Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 117 Copyright © 2024 Pearson Education, Inc.

3) What was the approximate Internet penetration rate in 2022 for individuals that have attained less than a high-school education? A) 55% B) 65% C) 75% D) 85% Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online.

4) All of the following are online communications used to support the evaluation of alternatives stages of the consumer decision process except: A) search engines. B) online catalogs. C) social networks. D) targeted banner ads. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 5) Approximately ________ of U.S. Internet users research products online but purchase them offline. A) 7% B) 9% C) 25% D) 50% Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 6) In modeling online consumer behavior, the concept of "consumer skills" refers to the: A) education level of the consumer. B) communication skills of the consumer. C) knowledge consumers have about how to conduct online transactions. D) product evaluation skills of the consumer. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 7) Research shows the two key factors shaping the decision to purchase online are utility and trust. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online.

8) A roughly equal percentage of men and women in the United States use the Internet today. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 9) Consumers choose the online channel primarily due to social media influence. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 10) Online traffic is partially driven by offline brands and traditional shopping. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 11) The majority of online shoppers find vendors by clicking on display ads. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online. 12) Some people still don't shop online. Why? Answer: About 7.4% of Internet users do not shop or buy online. One of the most important factors cited by those who don't shop or buy online is the "trust factor," the fear that online merchants will cheat you, lose your credit card information, or use the personal information you give them to invade your privacy, bombarding you with unwanted e-mail and pop-up ads. Secondary factors can be summarized as "hassle factors," like shipping costs, returns, and the inability to touch and feel the product. Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer behavior and purchasing, and how consumers behave online.

13) Which of the following online advertising formats attracted the least amount of spending in 2022? A) search B) classifieds C) rich media D) e-mail Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 14) The average click through rate for search engine advertising is around: A) 1% B) 2% C) 4% D) 5% Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 15) Which of the following forms of online advertising is expected to grow the most between 2022 and 2026? A) paid search B) sponsorships C) search engines D) video Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

16) Which of the following statements about behavioral targeting is not true? A) Behavioral targeting is also known as interest-based advertising. B) Behavioral targeting delivers relevant ads by matching characteristics of the ad with the characteristics of the content adjacent to the ad placement. C) Behavioral targeting combines online behavioral data into a collection of interest areas and shows ads based on those interests. D) Behavioral targeted based on third-party tracking tools has been met with increasing public and political resistance Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 17) Which of the following is the top digital advertising platform in terms of U.S. estimated ad revenues in 2022? A) Google/YouTube B) Meta C) TikTok D) Amazon Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 18) Which of the following lists the top four online advertising formats in the order of the amount of online advertising spending in 2022? A) Video, banner ads, search, rich media B) Search, video, banner ads, rich media C) Rich media, search, banner ads, video D) Video, rich media, search, banner ads Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

19) Pinterest's Lens is an example of which of the following? A) keyword advertising B) SEO C) voice search D) visual search Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 20) Which of the following is not a practice that degrades the results and usefulness of search engines? A) social search B) link farms C) content farms D) click fraud Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 21) Amazon's Associates program is an example of which of the following? A) viral marketing B) local marketing C) affiliate marketing D) lead generation marketing Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 22) Ad blockers operate in a manner similar to which of the following? A) anti-virus software B) firewalls C) Flash cookies D) anonymous browsing Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

23) Which of the following is not a primary source of ad fraud? A) browser extensions that insert ads into a premium publisher's website and then list the ads as available on a programmatic ad exchange B) ad targeting firms that create bots that imitate the behavior of real shoppers and then charge advertisers C) botnets hired by publishers to click on web pages to create phony traffic D) native advertising that is displayed on a social media site Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 24) The percentage of all e-mail that is spam averaged around ________ in 2022. A) 45% B) 55% C) 65% D) 75% Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 25) Which of the following statements about CAN-SPAM is not true? A) CAN-SPAM authorizes state attorneys general to bring lawsuits against spammers. B) CAN-SPAM prohibits unsolicited e-mail (spam). C) CAN-SPAM prohibits the use of deceptive subject lines and false headers. D) Large spammers are among CAN-SPAM's biggest supporters. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 26) Which of the following lists the top four online advertising formats in order of estimated average annual growth rate between 2022 and 2026? A) Video, rich media, search, banner ads B) Search, video, banner ads, rich media C) Rich media, video, search, banner ads D) Banner ads, search, video, rich media Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 124 Copyright © 2024 Pearson Education, Inc.

27) Which of the following is the most important tool in establishing a relationship with the customer? A) company website B) company CRM system C) Facebook D) search engine display ads Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 28) All of the following are "traditional" online marketing tools except: A) affiliate marketing. B) e-mail and permission marketing. C) social marketing. D) sponsorship marketing. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 29) All of the following are forms of display ads except: A) sponsorships. B) native advertising. C) rich media ads. D) e-mail. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 30) The NIKEiD program is an example of which of the following marketing techniques? A) customer co-production B) transactive content C) price discrimination D) permission marketing Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

31) The incremental cost of building the next unit of a good is called the: A) Law of One Price. B) variable cost. C) marginal cost. D) fixed cost. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 32) Which of the following statements about a free pricing strategy is not true? A) Free products and services can knock out potential and actual competitors. B) The free pricing strategy was born in the early days of the Web. C) It is difficult to convert free customers into paying customers. D) Free products and services can help build market awareness. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 33) Creating multiple variations of information goods and selling these to different market segments at different prices is called: A) bundling. B) customization. C) dynamic pricing. D) versioning. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 34) All of the following are fixed price strategies except: A) bundling. B) versioning. C) free pricing. D) yield management. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

35) Which of the following is a form of marketing in which a firm pays a commission when visitors to a different website, blog, or social media page click the firm's link or ad on that website or page and visit the firm's website? A) affiliate marketing B) viral marketing C) native advertising D) lead generation marketing Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 36) Which of the following is not an advantage of online advertising? A) Online advertising provides the ability to target ads to individuals and small groups. B) Online advertising provides greater opportunities for interactivity. C) Owners of websites who sell advertising space have agreed-upon standards and routine audits to verify their claimed numbers, unlike traditional media outlets. D) The Internet is where the industry has moved, especially the desirable 18—34 age group. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 37) Which of the following is based on the idea of complete price transparency in a perfect information marketplace? A) the Law of One Price B) dynamic pricing C) price discrimination D) versioning Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 38) In 2022, an estimated ________ is expected to be spent on online advertising. A) $25 billion B) $34.5 billion C) $250 billion D) $345 billion Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 127 Copyright © 2024 Pearson Education, Inc.

39) Which of the following statements about native advertising is not true? A) Almost all of the social network ad spending is native advertising. B) Most consumers are able to easily distinguish editorial content from native advertising. C) Native advertising's share of mobile display revenues has grown to 85% in 2021. D) Consumers look at native ads more frequently than they look at display ads. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 40) Which of the following is an automated, auction-based method for matching demand and supply for online display ads? A) retargeting B) behavioral targeting C) programmatic advertising D) keyword advertising Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 41) The marketing technique known as ________ involves merchants offering many products for which there is little demand. A) long tail marketing B) flash marketing C) yield management D) bait-and-switch Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 42) Uber has been criticized for using which of the following? A) flash marketing B) bundling C) surge pricing D) malware Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 128 Copyright © 2024 Pearson Education, Inc.

43) Research has found that a significant percentage of the ad impressions served across display advertising platforms are not actually viewed or even viewable. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 44) The highest amount of online advertising spending is for online video ads. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 45) According to Forrester Research, nearly two-thirds of all U.S. retail sales are now digitally influenced. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 46) Each of the different types of major marketing, and each of the different platforms, has different metrics to measure its effectiveness. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 47) Lead generation marketing firms specialize in inbound marketing. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 48) The concept of "customer satisfaction" is broader than the concept of "customer experience." Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

49) Bundling is the process of selling two or more products together for a price that is less than the sum of the two product's individual prices. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 50) How are blogs being used for marketing? Answer: Blogs have been around for a decade and are a part of the mainstream online culture. Blogs play a vital role in online marketing. Social networks have not replaced blogs, and in fact often point to blogs for long-form content. Because blog readers and creators tend to be more educated, have higher incomes, and be opinion leaders, blogs are ideal platforms for ads for many products and services that cater to this kind of audience. Because blogs are based on the personal opinions of the writers, they are also an ideal platform to start a viral marketing campaign. Advertising networks that specialize in blogs provide some efficiency in placing ads, as do blog networks, which are collections of a small number of popular blogs, coordinated by a central management team, and which can deliver a larger audience to advertisers. Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 51) What are LEAN principles and how do they relate to online display advertising? Answer: LEAN principles are an important aspect of the IAB's voluntary industry guidelines for display ads. LEAN is an acronym that stands for lightweight, encrypted, AdChoices-supported, and non-invasive advertising. In an attempt to enhance consumer acceptance of advertising, the standard contains guidelines with respect to animations, ad expansions, close buttons, user initiation, interstitials (ads that appear before, in-between, or after the primary content), video and auto-play video and audio. LEAN also includes a list of disruptive ad experiences that are no longer permitted, such as pop-up ads (ads that overlay or cover the content after the user has started viewing the content), auto expansion (ads that expand without user initiation), auto-play video with audio, and flashing animations. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools.

52) What is native advertising and why is it controversial? Answer: Native advertising is advertising that looks similar to editorial content. Native advertising is not new. Traditional native advertising includes television infomercials, newspaper advertorials, and entire sections of newspapers and magazines that are given over to advertisers, where the advertising looks similar to the rest of the publication. Typically, native ads mimic the editorial content around them, and increasingly include video. They appear outside the normal or expected area for ads and are labeled to indicate they are not editorial content, although in most cases the word "ad" is not used. On the Web or mobile screens, native ads are usually distinguished by a "sponsored" tag underneath the headline, often in a different color. Online native advertising is growing rapidly, especially on social networks. In 2022, native ad spending is expected to reach almost $ 88 billion. In the online world, native ads are most often found on social networks, as part of a Facebook Feed or Instagram Story. In fact, almost all (more than 97%) of social network ad spending is native advertising. Mobile social networks, in particular, do not have room for ads on the right side of the screen (the sidebar or right rail), and therefore native ads in the form of posts that look like other posts are the favored option. Native advertising's share of mobile display ad revenues has skyrocketed from 14% in 2012 to more than 85% in 2021. Native advertising is controversial. Researchers have found that many online consumers cannot distinguish between editorial content and sponsored ads that look like editorial content. Many consumers skip over labels like sponsored or promoted, and many do not understand the difference between paid and unpaid content. Critics contend that the purpose of native ads is to deceive or fool the consumer into thinking the ad has the same validity as the editorial content in media. The Federal Trade Commission (FTC) has explicit rules for native ads. The FTC examines the entire ad, including factors such as its overall appearance, similarity of its style to editorial content on the site on which it appears, and the degree to which it is distinguishable from such content. Labels indicating the commercial nature of the content need to be prominently displayed upon the viewer's first contact with the contact. However, compliance with the FTC's native advertising guidelines still remains problematic. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies and tools. 53) Which of the following is an open-source software framework used to collect and analyze a company's big data? A) data warehouse B) Hadoop C) SQL D) profiling Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing.

54) Which of the following statements about the Internet's impact on marketing is not true? A) The Internet has broadened the scope of marketing communications. B) The Internet has decreased the impact of brands. C) The Internet has increased the richness of marketing communications. D) The Internet has expanded the information intensity of the marketplace. Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 55) Which of the following features of e-commerce technology enables marketers to engage customers in a dialog and dynamically adjust the experience to the consumer? A) ubiquity B) richness C) information density D) interactivity Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 56) Which of the following features of e-commerce technology decreases the cost of delivering marketing messages and receiving feedback from users? A) personalization/customization B) universal standards C) ubiquity D) interactivity Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 57) The richness made possible by e-commerce technologies does which of the following? A) It reduces the cost of delivering marketing messages and receiving feedback from users. B) It allows consumers to become co-producers of the goods and services being sold. C) It allows video, audio, and text to be integrated into a single marketing message and consuming experience. D) It enables worldwide customer service and marketing communications. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 132 Copyright © 2024 Pearson Education, Inc.

58) All of the following statements about cookies are true except: A) third-party cookies enable advertising platforms to track user behavior across websites and devices. B) the data typically stored in cookies includes a unique ID and e-mail address. C) a first-party cookie makes shopping carts possible by allowing a site to keep track of a user's actions. D) As of 2022, the Safari, Firefox, and Chrome web browsers all block third-party cookies by default. Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 59) A web beacon is: A) a cookie that carries a virus. B) an executable cookie. C) an automated applet for performing web searches. D) a tiny graphics file embedded in an e-mail or web page. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 60) ________ is an open-source database that can store and analyze both structured and unstructured data. A) ASP B) PHP C) Hadoop D) JSP Answer: C Difficulty: Easy AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing.

61) A ________ is a repository of customer information that records all contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to know the customer. A) customer service chat system B) CRM system C) data warehouse D) transactive content system Answer: B Difficulty: Easy AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 62) Which of the following provides web marketers with a very quick means of identifying a customer and understanding his or her behavior at a site? A) transaction logs B) cookies C) registration forms D) data warehouses Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 63) Transaction logs are built into client software and not the web server software. Answer: FALSE Difficulty: Easy AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 64) Regular in-app cookies can be shared between apps. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing.

65) Discuss the differences between a first-party cookie and a third-party cookie. Answer: A first-party cookie is placed on the user's computer by the same domain name as the page the user is visiting. A first-party cookie provides a company's marketing team with a very quick means of identifying customers and understanding their prior behavior at the site. Although cookie technology does not directly obtain visitors' names and addresses, if a person has registered at a site, that information can be combined with cookie data to identify the visitor. Companies also use first-party cookies to determine how many people are visiting their website, whether they are new or repeat visitors, and how often they have visited. Cookies make shopping carts and "quick checkout" options possible by allowing a site to keep track of users as they add to their shopping cart. Each item added to the shopping cart is stored in the site's database along with the visitor's unique ID value. First-party cookies can be blocked and/or deleted by users, although the majority of users do not do so. A third-party cookie operates similarly to a first-party cookie but enables advertising platforms to track user behavior across websites and devices. In the past, third-party cookies were supported by all the major web browsers, but that has begun to change. Apple's Safari and Mozilla's Firefox browsers now block third-party cookies by default, and Google has announced that it will follow suit with its Google Chrome browser, which has more than a 65% share of the desktop web browser market in the United States, beginning in the second half of 2024. Difficulty: Moderate AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing.

66) What is big data and why are marketers interested in it? Answer: Big data usually refers to very large data sets, often from different sources, in the petabyte, exabyte, and even terabyte range. The volumes of data are so large that traditional database management systems cannot capture, store, and analyze the data in a reasonable time. Some examples of big data challenges are analyzing 12 terabytes of tweets generated by Twitter each day to improve understanding of consumer sentiment toward various products; analyzing 100 million e-mails in order to place appropriate ads alongside the e-mail messages; or analyzing 500 million call detail records to find patterns of fraud and churn. Digital information is growing exponentially, topping an expected 94 zettabytes worldwide in 2022. According to technology research firm IDC, data is more than doubling every two years, so the amount of data available to organizations is skyrocketing. The next frontier will be data derived from the Internet of Things (IoT). Making sense out of big data quickly to gain a market advantage is critical. Marketers are interested in big data because it allows them to link huge amounts of data from a variety of different sources, which in the past they were unable to do, and mine if for patterns of consumer behavior, with the potential to derive new insights into customer behavior, financial market activity, or other phenomena. For instance, Shutterstock, the global online image marketplace, stores 200 million images and adds 55,000 more each day. To find ways to optimize the Shutterstock experience, Shutterstock analyzes its big data to find out where its website visitors place their cursors and how long they hover over an image before making a purchase. However, to derive business value from this data, organizations need new technologies and analytic tools capable of managing and analyzing nontraditional data along with their traditional enterprise data. Difficulty: Moderate AACSB: Information technology Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 67) Discuss the revolution in Internet marketing technologies. What are four primary impacts the Internet has had on marketing? Answer: The Internet has had four broad impacts on marketing. First, the Internet as a communications medium has broadened the scope of marketing. Marketing messages can now easily reach a greater number of people. Second, the Internet has increased the richness of marketing communications by combining text, video, and audio content into rich messages. Some even think that the Web is a richer medium than television or video because of the complexity of messages and the huge amount of, and wide ranging, content that is available. Third, the Internet has greatly expanded the information intensity of the marketplace by providing marketers with fine-grained, detailed, real-time information about consumers as they transact in the marketplace. Fourth, the always-on, always-attached, environment created by mobile devices results in consumers being much more available to receive marketing messages. One result is an extraordinary expansion in marketing opportunities for firms. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 6.3: Identify and describe the main technologies that support online marketing.

68) Define and describe the functionality of customer relationship management (CRM) systems. Answer: Customer relationship management systems are an important Internet marketing technology. They serve as repositories for customer information that records all of the contacts a customer has with a firm including its website. CRM systems can generate a profile of each customer that is available to everyone in the firm who has a need to "know the customer." CRM systems also supply analytical software required to analyze and use customer information and that will make this data valuable to the firm. In the past, firms generally did not maintain a single storehouse of customer information, and any customer data was organized along product lines with each product line maintaining a separate customer list. CRMs are part of the evolution towards customer-centric and segmented market-based businesses, and away from this product-based model. CRMs use database technology with capabilities for addressing the needs of individual customers and differentiating products or services to meet those needs. The customer profiles generated by a CRM can include a map of the customer's relationship with the firm, the products they have bought and the frequency of purchases, the demographic and psychographic profile for each customer, profitability measures, a complete contact history, marketing and sales information containing marketing campaigns that the customer received and the customer's responses to them, website visits, and mobile app downloads. With these profiles, CRMs can be used to sell additional products and services, develop new products, increase product utilization, reduce marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high lifetime value customers, enable personal communications, improve customer loyalty, and increase product profitability. The goal is what is known as a "360-degree" view that enables a company to know what its customers buy, how they browse, and what kinds of communications and offers will engage them. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 6.3: Identify and describe the main technologies that support online marketing. 69) If you want to determine the size of your website's audience, the metric you will use for the most accurate measurement will be: A) page views. B) unique visitors. C) hits. D) reach. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.

70) Cross-platform attribution refers to: A) how to assign credit to different marketing initiatives. B) understanding why visitors to a website purchase a product. C) understanding how impressions lead to visits. D) understanding why people click on ads. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 71) VTR measures the ________ response rate to an ad. A) 30-minute B) 24-hour C) 7-day D) 30-day Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 72) What kinds of ads have the highest CTR? A) video ads B) e-mails to an in-house list C) social network display ads D) banner display ads Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 73) Purchasing an online ad on a CPA basis means that the advertiser: A) pays for impressions in 1,000 unit lots. B) pays a pre-negotiated fee for each click an ad receives. C) pays only for those users who perform a specific action, such as registering, purchasing, etc. D) exchanges something of equal value for the ad space. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.

74) eCPM measures the ROI of an ad by dividing the total earnings of the ad by which of the following? A) the total number of impressions B) the total number of impressions in hundreds C) the total number of impressions in thousands D) the total number of impressions in millions Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 75) Which of the following measures the average length of stay at a website? A) loyalty B) stickiness C) page views D) retention rate Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 76) Acquisition rate is a measure of the: A) percentage of visitors who indicate an interest in a site's products by registering or visiting a product's pages. B) percentage of visitors who become customers. C) percentage of existing customers who continue to buy on a regular basis. D) percentage of shoppers who do not return within a year after their initial purchase. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 77) Recency refers to the: A) percentage of customers who do not return during the next year after an initial purchase. B) time elapsed since the last visit made by a customer. C) percentage of existing customers who continue to buy on a regular basis. D) percentage of customers who return to the site within a year to make additional purchases. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.

78) View-to-cart ratio is a measure of the: A) percentage of visitors who indicate an interest in a site's products by registering or visiting a product's pages. B) percentage of views that lead to an add-to-cart action. C) percentage of existing customers who continue to buy on a regular basis. D) percentage of shoppers who do not return within a year after their initial purchase. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 79) Which of the following measures the ratio of items purchased to product views? A) conversion rate B) cart conversion rate C) browse-to-buy ratio D) view-to-cart ratio Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 80) Which of the following measures the percentage of e-mails that could not be delivered? A) abandonment rate B) unsubscribe rate C) bounce-back rate D) attrition rate Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 81) Which of the following is the most meaningful metric for video ads? A) view time B) CTR C) completion rate D) skip rate Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.

82) Which of the following measures the percentage of times an ad is clicked? A) retention rate B) CTR C) loyalty rate D) conversion rate Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 83) The average abandonment rate is highest for shopping carts accessed via smartphones. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. 84) What is cross-platform attribution and why is it difficult? Answer: Cross-platform attribution involves understanding how to assign appropriate credit to different marketing initiatives on a variety of platforms that may have influenced a consumer along the way to an ultimate purchase. There is increasing recognition that first-click and last-click models that focus on either the first or last marketing channel or advertising format that a consumer engages with prior to a purchase, are not sufficient. For instance, in 2021, Google announced that it was updating its ad attribution model. Instead of relying solely on consumers' last-click, it will also employ a data-driven attribution model based on machine learning to assess data from throughout the entire conversion pipeline. The phase-out of third-party tracking, which historically has provided the underpinnings of the online measurement and attribution infrastructure, by making it easier to know when a consumer had been served an ad in one place and then made a related purchase somewhere else, will also pose new challenges. Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.

85) What is marketing analytics software and what is it used for? Answer: Marketing analytics software is a software package that collects, stores, analyzes, and graphically presents data on each of the stages in the conversion of the shopper to customer process on e-commerce sites. Marketing analytics packages help business managers optimize the return on investment on their websites and social marketing efforts, by building a detailed understanding of how consumers behave when visiting their websites. They help analyze where customers come from, what they do on the site, and which content is most appealing, as well as how users shop and add to their shopping cart, and whether they abandon their shopping cart. Marketing analytics also allows managers to measure the impact of specific marketing campaigns. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 6.4: Understand the costs and benefits of online marketing communications. E-commerce 2023, 17e (Laudon/Traver) Chapter 7 Social, Mobile, and Local Marketing 1) All of the following were popular types of online marketing before 2007 except: A) e-mail. B) corporate websites. C) mobile marketing. D) display ads. Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 2) Which online marketing platform generates the most advertising revenues? A) mobile B) social C) local D) location-based mobile local Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 3) By 2026, it is estimated that advertisers will be spending which of the following amounts on mobile marketing? A) $25 million B) $250 million C) $25 billion D) $250 billion Answer: D Difficulty: Moderate 142 Copyright © 2024 Pearson Education, Inc.

AACSB: Analytical thinking Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing.

4) In which year did spending on mobile marketing first exceed the amount spent on desktop/laptop marketing? A) 2014 B) 2015 C) 2016 D) 2017 Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 5) Most social network marketing takes place on the mobile platform. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 6) In 2022, the amount spent on local (digital) marketing is expected to exceed the amount spent on mobile marketing. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing.

7) What has changed in online marketing since 2007? Answer: Since 2007, Facebook and other social network sites have grown rapidly, smartphones have taken the market by storm, and local marketing has taken off. Prior to 2007, online marketing consisted of creating a corporate website, buying display ads on Yahoo and purchasing AdWords on Google, and sending e-mail. The display ad was the most prevalent form of online advertising. "Eyeballs" were the primary measure of a site's success, and "impressions" were the measure of an advertising campaign's success. What's different about the world of social-mobile-local marketing and advertising are the related concepts of "conversations" and "engagement. The emphasis in online marketing has shifted from a focus on eyeballs to a focus on participating in customer-oriented conversations. Today, marketing is based on businesses marketing themselves as partners in multiple online conversations with customers and critics. Marketing requires firms to locate and participate in conversations happening on social media. Businesses can no longer tightly control their brand messaging. In addition, in 2007, mobile marketing was in its infancy, but now the amount spent on mobile marketing has overtaken the amount spent on desktop/laptop marketing. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 8) How much time a month does the average U.S. adult spend on TikTok? A) about 2 hours B) about 10 hours C) about 12 hours D) about 22 hours Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.1: Understand the difference between traditional online marketing and the new social-mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 9) Which of the following attracts a highly educated, professional and managerial audience? A) Snapchat B) TikTok C) LinkedIn D) Instagram Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

10) Which of the following is the first step in the social marketing process? A) community B) amplification C) fan acquisition D) engagement Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 11) Encouraging users to click a Like button is an example of which step in the social marketing process? A) fan acquisition B) brand strength C) community D) amplification Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 12) The Facebook Feed includes all of the following except: A) status updates. B) app activity. C) Likes. D) tweets. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

13) Which of the following is the leading platform for influencer marketing spending? A) Facebook B) Instagram C) TikTok D) Twitter Answer: B Difficulty: Difficult AACSB: Information technology Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 14) Which of the following is the most prominent place for advertisements on Facebook? A) the Feed B) Stories C) Messenger D) Facebook Watch Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 15) In 2022, U.S. adults overall are expected to average about how many hours a month on all social networks combined? A) 25 B) 50 C) 60 D) 100 Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

16) Which of the following is a history of your actions on Facebook? A) Feed B) Timeline C) Stories D) Reels Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 17) TikTok's first push into advertising was with which of the following types of advertising? A) search advertising B) lead generation ads C) video ads D) hashtag challenges Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 18) All of the following marketing tools on Facebook require payment except: A) Brand Pages. B) Facebook Watch. C) Sponsored Messages. D) Instant Experience Ads. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 19) The ratio of impressions to fans is a measure of: A) engagement. B) amplification. C) community. D) fan acquisition. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 148 Copyright © 2024 Pearson Education, Inc.

20) Which of the following Twitter marketing tools enables marketers to show video ads that run prior to or during premium video content? A) Twitter Takeover B) Twitter Amplify C) Twitter Cards D) Twitter Live Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 21) Which of the following Twitter marketing tools involves a coupon or other promotional offer that appears in users' Twitter timeline? A) Promoted Ad B) Follower Ad C) Twitter Takeover D) Twitter Card Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 22) Which of the following statements about Pinterest is not true? A) Baby Boomers are Pinterest's largest single demographic segment. B) Pinterest's visitors are overwhelmingly female. C) Pinterest's Product Pints include real-time pricing, availability, and link to where an item can be purchased. D) Pinterest's Rich Pins are currently free. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

23) Which of the following are features of both Pinterest and Twitter? A) tweets B) hashtags C) pins D) boards Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 24) All of the following are Pinterest marketing tools except: A) Brand pages. B) Rich Pins. C) Promoted Pins. D) Promoted Accounts. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 25) The number of people exposed to pins on Pinterest is a measure of which of the following? A) engagement B) community C) brand strength D) fan acquisition Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

26) Which of the following Facebook marketing features did Tonal use to motivate and interact with customers? A) Facebook Watch B) Facebook Groups C) Facebook Live D) Facebook Ads Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 27) Which of the following is another term for amplification? A) impressions B) reach C) conversation rate D) conversion ratio Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 28) All of the following are examples of dark social except: A) e-mail. B) tweets. C) SMS texts. D) instant messages. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

29) Which of the following is not a true statement about the FTC's Endorsement Guides? A) The Guidelines require that the endorser be an actual user of the product. B) The Guidelines require the endorser fully disclose a material connection between themselves and the brand. C) A brand is not liable for false or unsubstantiated statements made by an endorser. D) The FTC has proposed amendments to the Guides that would expand the definition of endorsement to include a social media user tagging a brand in a post. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 30) Which of the following allows Facebook to know which other sites users visit? A) Messenger B) Like button C) hashtags D) Facebook Watch Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 31) Which of the following is not true about the use of Facebook's Messenger app? A) Companies can use chatbots to provide automated customer support and other e-commerce services. B) Companies can send Sponsored Messages to customers who they previously engaged with. C) Companies can use display ads in Messenger in-boxes. D) Messenger's Buy Now feature requires payment to be made via Facebook Pay. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

32) Which of the following is a social network site that allows users to send and receive 280-character messages, as well as news articles, photos, and videos? A) Facebook B) Twitter C) Pinterest D) Instagram Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 33) Companies are not permitted to collect personal information from children under the age of ________ without parental consent. A) 8 B) 13 C) 15 D) 18 Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 34) Which of the following statements about COPPA is not true? A) COPPA is not applicable to Internet of Thing (IoT) devices. B) COPPA can only be enforced by the Federal Trade Commission. C) COPPA provides that companies are not permitted to use personal information collected from children under 13 years of age without the verifiable prior consent of their parents. D) The largest fine levied by the FTC under COPPA as of 2022 was against Google and YouTube. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

35) Which of the following is most similar to Pinterest? A) LinkedIn B) Instagram C) YouTube D) Tumblr Answer: B Difficulty: Difficult AACSB: Analytical thinking Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 36) ExchangeHunterJumper.com's social media presence on which of the following platforms was hacked and shut down? A) Facebook B) YouTube C) Pinterest D) Instagram Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 37) Which of the following refers to the number of interactions among members of a group and reflects the "connectedness" of the group, even if these connections are forced on users? A) engagement B) information density C) social density D) amplification Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

38) Which of the following refers to those forms of social sharing that occur off the major social networks, through alternative communication tools? A) social density B) dark social C) amplification D) engagement Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 39) Which of the following is a not a type of Rich Pin? A) Product Pin B) Idea Pin C) Article Pin D) Recipe Pin Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 40) Which of the following statements about Instagram is not true? A) Instagram is owned by Meta. B) Instagram's most rapidly growing demographic group is comprised of people under the age of 35. C) Instagram is expected to generate around $30 billion in U.S. ad revenues in 2022. D) Instagram has more than 1.25 billion users worldwide. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

41) Which of the following involves using a variety of tools to encourage users to interact with content and brand? A) social density B) engagement C) amplification D) dark social Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 42) Which of the following involves using the inherent strength of social networks to encourage visitors and fans to share their Likes and comments with friends? A) social density B) engagement C) amplification D) dark social Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 43) Which of the following is a TikTok feature that allows users to cut and edit other people's videos and incorporate them into their own content? A) Duet B) Pangle C) Hashtags D) Stitch Answer: D Difficulty: Moderate AACSB: Information technology Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

44) Influencer marketing is a method of generating engagement. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 45) Instagram's most rapidly growing demographic groups are comprised of people older than 35. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 46) TikTok does not sell display ads. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 47) Brand pages on Facebook typically attract more visitors than a brand's website. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 48) Twitter Follower Ads enabled advertisers to move their hashtags to the top of a user's Timeline or Trends List. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

49) Pinterest Lens is an augmented reality filter app. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 50) In 2022, Millennials and Gen-Zers together represent about 85% of Snapchat's monthly active U.S. users. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 51) Advertisers tend to use LinkedIn for branding purposes. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

52) What are some of the downsides of social marketing? Answer: Social marketing is not without its disadvantages. One problem is that brands lose a substantial amount of control over where their ads appear in terms of other content and what people say about their brands on social sites. Ads placed on Facebook according to an algorithm can be placed near content that does not represent the values of the brand. This is not peculiar to social marketing, as advertising using Google's advertising platform faces the same problem. This is very different, however, from TV ads where brands maintain near complete control. Brand safety is also a concern in influencer marketing. Influencers may make statements, either about the brand or unrelated to the brand, that do not represent the values of the brand, resulting in damage to the brand. There are also issues related to the disclosure of influencer marketing. The Federal Trade Commission (FTC) provides advisory guidelines (Endorsement Guides) with respect to endorsement and testimonial advertising, which includes influencer marketing. Among other requirements, the Guides require an endorser to be an actual user of the product and to fully disclose any material connection between themselves and the brand. The brand may be liable for failing to disclose a material connection with the endorser as well as any false or unsubstantiated statements made by the endorser. Endorsers may be liable for their statement as well. In 2022, the FTC issued several proposed amendments to the Guides, including expanding the definition of an "endorsement" to include a social media user tagging a brand in a post and stating that all brand partnership disclosures must be "clear and conspicuous," among other suggestions. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

53) Name and briefly describe the five basic steps in the social marketing process. Answer: The five basic steps in the social marketing process are fan acquisition, engagement, amplification, community, and brand strength (sales). Social marketing campaigns begin with fan acquisition, which involves using any of a variety of means to attract people to a Facebook page, Instagram account, Twitter feed, Pinterest board, or other platform. The next step is to generate engagement, which involves using a variety of tools to encourage users to interact with your content and brand. You can think of this as "starting the conversation" around your brand. Once you have engaged visitors, you can begin to use social network features to amplify your messages by encouraging users to tell their friends by clicking a Like button, sharing a post, or by sending a message to their followers on Twitter. Amplification involves using the inherent strength of social networks to continue the spread of its message. Once you have gathered enough engaged fans, you will have created the foundation for a community – a more or less stable group of fans who are engaged and communicating with one another over a substantial period of time (several months or more). The ultimate goal is to enlarge the firm's "share of the online conversation." The process ends with strengthening the brand and, hopefully, additional sales of products and services. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 54) List and briefly describe some of the basic metrics to use with a social marketing campaign in terms of the five basic steps of the social marketing process. Answer: At the most elementary level, the number of fans (or followers) generated on the platform is the beginning of all social marketing. Metrics for the fan acquisition (impressions) stage include the number of fans/followers and monthly growth; the number of people exposed to posts and other content; the number of those exposed who become fans/followers; and the ratio of impressions to fans/followers. Engagement relates to how your fans are interacting with your content, how intensely, and how often. Understanding the kinds of content (videos, text, photos, or posts from fans) that create the highest levels of engagement is also very important. Metrics for the engagement (conversation rate) stage include the number of users who responded to brand content; the number of posts, comments, and responses to brand content; the number of views of brand content; and the number of "Likes" generated per visitor; the number of minutes on average that visitors stay on your brand or product page (duration); and the rate of Likes per post or other content (applause rate). The ability to amplify your marketing message by tapping into the social networks used by your fans is also at the core of social marketing. Amplification (also sometimes referred to as reach) can be quantified by examining the rate at which fans recommend your content to their friends and how many of their friends further recommend your content to their friends. Metrics include the percentage of Likes, shares, or posts to other sites (the rate at which fans share content). Measuring the strength of a social network community is not that much different from measuring the strength of an offline community. In both cases, you attempt to measure the collective activities of everyone in the community. Metrics include the monthly interaction rate with your content; the average monthly on-site minutes for all fans/followers; and the ratio of positive to negative comments. Measuring sales that result from social campaigns is somewhat more straightforward. First, 160 Copyright © 2024 Pearson Education, Inc.

measure the percentage of sales that you receive from the social network. You can easily measure the number of visits to your website that originate on the social network and the number of sales that these visits generate. In addition, you can compare purchase rates (conversion rate) for fans to conversion rates for non-fans. More importantly, you can compare the social network conversion rate to that of visitors who come from different marketing channels such as e-mail, display ads, and blogs. Metrics include the number of leads generated (people who sign up for news or content); Visitor/lead rate: the number of visitors that become leads compared to the number resulting from other campaigns; the percentage (or revenue) of your online sales that are generated by social network links compared to the percentage generated by other platforms, such as e-mails, search engines, and display ads; the percentage of social network—sourced customer purchases compared to other sources of customers (conversion ratio); and the conversion ratio for friends of fans/followers. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest. 55) What are the basic steps in starting a TikTok marketing campaign? Answer: TikTok is very different from Facebook, Instagram, or Twitter. TikTok has a number of unique features, such as the TikTok algorithm, as well as unique user demographics (the majority of its users are younger than 30) and behaviors. Although TikTok now offers a variety of advertising options, marketing on TikTok is driven primarily by influencers and viral videos. The first step in a TikTok marketing campaign is to create a profile. Then start creating and posting video content, paying particular attention to hashtags, filters, and effects. Partner with creators and influencers. Comment regularly and encourage comments in your posts. Next, launch organic hashtag challenges, including social media contests to encourage participation. Finally, start trying some of TikTok's ad formats, such as in-feed ads, and for larger companies, brand takeovers, TopView ads, and Branded Hashtag Challenges. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Instagram, TikTok, Twitter, and Pinterest.

56) Which of the following is not true about mobile marketing? A) In 2022, mobile marketing expenditures are expected to account for more than two-thirds of all spending on online marketing B) By 2026, spending on mobile marketing is expected to be three times as much as spending on desktop marketing. C) Spending on mobile marketing is growing much more rapidly than spending on advertising aimed at desktop computers. D) The top three mobile advertising platforms, ranked in terms of mobile advertising revenue, are Google/YouTube, Meta, and Twitter. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 57) Which of the following is the top app in terms of percentage reach? A) YouTube B) Instagram C) Twitter D) Facebook Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 58) On average, users use about ________ apps a month on their smartphone. A) 10 B) 15 C) 45 D) 55 Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 59) Which of the following statements about Google and mobile marketing is not true? A) Google has seven of the top 20 apps in terms of percentage of reach. B) The prices Google can charge for mobile ads are higher than what it can charge for desktop computer ads. C) Meta has surpassed Google in mobile advertising revenue. D) About 65 % of all mobile search ad revenue is generated by Google. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign.

60) Which of the following statements about Amazon is not true? A) Amazon's mobile app is the online retail e-commerce app in the top 10 most used smartphone apps. B) Amazon generates more U.S. mobile marketing revenues than Meta. C) Amazon's mobile app reaches almost 50% of all U.S. adult smartphone user. D) Amazon has an 8% share in the mobile marketing marketplace. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 61) Which of the following formats generates the second-highest amount of mobile ad spending revenue? A) search engine advertising B) display advertising C) video advertising D) mobile messaging Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 62) People spend the most time doing which of the following when using a mobile device? A) watching videos B) interacting on social networks C) listening to music and podcasts D) reading news and magazines Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 63) Which of the following used a video coupled with an interactive game for smartphone users to increase awareness of its brand? A) McCormick & Company B) Dior Beauty C) Domino's Pizza D) Proozy Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign.

64) Which of the following generates the most mobile ad spending? A) display ads B) search engine advertising C) video ads D) SMS text messages Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 65) Which of the following is not a major provider of mobile display advertising? A) MoPub B) inMobi C) AdMob D) Webtrends Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 66) Which of the following is the leading mobile retailer in the United States? A) Walmart B) Amazon C) Google D) QVC Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 67) Which of the following has been a leader in enabling augmented reality for mobile marketing? A) Twitter B) Google C) Snapchat D) Apple Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 68) Traditional retail products and travel services are the source of much of the current growth in m-commerce. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 164 Copyright © 2024 Pearson Education, Inc.

69) Purchases made on tablet computers are the fastest growing and largest source of m-commerce revenues. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 70) SMS text messaging generates most of the mobile marketing spending. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 71) What are the implications for marketers given that users spend almost 90% of their total mobile time using apps and that on average, only use about 20 apps a month? Answer: The implications for marketers are quite clear: if consumers are primarily using apps rather than browsing the Web on their mobile devices, marketers need to place ads in apps where most of the action is for attracting consumers, and that means social, entertainment, and game sites. Second, if mobile consumers only use, on average, 20 apps, then marketers need to concentrate their marketing in these popular apps, let's say, the top 100. Niche marketers, on the other hand, can concentrate their ads in apps that support that niche. A distributor of diving equipment, for instance, could place ads in apps devoted to the diving community. There may not be many users of the app, but those who do use it are highly motivated on the topic. Another implication for marketers is that rather than focus on mobile display ads that are difficult to read, the best ad may be an entertaining video ad that captures the viewer's attention or an ad in an app that is precisely targeted to the consumer's current activities and interests. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign.

72) How does the multi-screen environment change the marketing funnel? Answer: Consumer purchasing behavior changes in a multi-screen world. Consumers will often use two or more screens at once, tweeting when watching a TV show, or moving seamlessly from a TV ad to a mobile search for more information, and finally making an online purchase. Also, the more screens people use, the more shopping and purchasing they do. One conclusion is that the more screens consumers have, the more consumer touchpoints or marketing opportunities exist. The implications of the multi-device platform, or screen diversity environment, are that marketing needs to be designed for whatever device the consumer is using, and consistent branding across platforms will be important. Screen diversity means that one ad size, for instance, will not fit all situations, and that branding images will need to be adjusted automatically based on the device the consumer is using. From a design perspective, graphics and creative elements will appear differently depending on the screen. The requirement to find customers on multiple screens can add considerably to the cost of marketing online. Companies may find that they need to develop a presence and market not only on websites, but on mobile websites, and/or smartphone apps as well. Perhaps they may not be able to afford all three and may want to choose only one. In that case, which is the best? Much depends on what the point of the marketing is. To drive sales, a website might be more effective, but to drive brand awareness, and engagement, social and entertainment apps might be better. But even beyond screen adaptability, a multi-screen world means merchants need to be on all platforms, and to be integrated across platforms, to send a coherent message and to create a convenient consumer platform. The marketing environment today is much more complex than placing banner ads on pages or on search engine results pages on the Web. Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 73) How do people use their mobile devices today? Answer: Most people believe that people use their mobile devices on the go, but in fact, according to one of the very few studies of actual mobile behavior, almost 70% of all mobile minutes occur in the home. Recent data shows that entertainment, not shopping or buying, is the primary focus (at least in terms of time) for mobile device users. Of the more than four and a half hours a day that people spend using their mobile devices, one hour and 20 minutes are spent listening to music and podcasts, about one hour and 10 minutes on social networks, almost one hour on watching videos, and about half an hour using mobile game apps. But although mobile devices are still primarily used for entertainment, socializing, and communicating, with less time spent using them for shopping or buying, this pattern is not necessarily permanent. M-commerce is surging. Initial expectations were that tablets would provide the primary m-commerce platform, but that has not proven to be the case. As the size of smartphone screens has grown and their resolution has improved, coupled with better mobile search, better location- and context-based discovery, and better mobile payment systems, the smartphone buying experience has improved, resulting in rapidly growing smartphone m-commerce sales. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign.

74) Which of the following statements about BLE is not true? A) Only Apple iPhones can use BLE. B) BLE uses less power than traditional Bluetooth or GPS. C) BLE has a two-way, push-pull communication capability. D) BLE is more accurate than targeting through Wi-Fi triangulation. Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 75) What percentage of local media marketing is spent on online marketing? A) About 17% B) About 27% C) About 47% D) About 67% Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign. 76) In 2022, how much are advertisers expected to spend on location-based (local) mobile marketing? A) $32 billion B) $79 billion C) $92 billion D) $250 billion Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 77) All of the following are proximity marketing technologies except: A) QR codes B) iBeacon C) NFC D) Geo-search Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.4: Understand the capabilities of location-based local marketing.

78) Which of the following dominates the local mobile search market? A) Twitter B) Apple C) Meta D) Google Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 79) Apple's iBeacon uses which of the following technologies? A) BLE B) NFC C) E9-1-1 D) QR codes Answer: A Difficulty: Moderate AACSB: Information technology Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 80) Which of the following account for the vast majority of location-based mobile marketing? A) Google and Twitter B) Google and Meta C) Meta and Twitter D) Google and TikTok Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 81) Google uses which of the following to build a global database of wireless access points and their geographic locations? A) E9-1-1 B) Street View cars C) iBeacons D) BLE Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 82) Eddystone is an open-source standard for beacon technology. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 168 Copyright © 2024 Pearson Education, Inc.

83) A cell phone's GPS is accurate to within five feet of the actual location of the phone. Answer: FALSE Difficulty: Moderate AACSB: Information technology Learning Objective: 7.4: Understand the capabilities of location-based local marketing. 84) What technologies and techniques are employed in location-based mobile marketing? Answer: There are two general types of location-based marketing techniques: geo-aware and proximity marketing. Geo-aware techniques identify the location of a user's device and then target marketing to the device, recommending actions within. Proximity marketing techniques identify a perimeter around a physical location, and then target ads to users within that perimeter, recommending actions possible within the fenced-in area. The perimeter can be from hundreds of feet (in urban areas) to several miles (in suburban locations). For instance, if users walk into the geo-fenced perimeter of a store, restaurant, or retail shop, they will receive ads from these businesses. Both techniques utilize the same locating technologies. GPS is the most accurate positioning method in theory, but in practice, the signal can be weak in urban areas, nonexistent inside buildings, signals can be deflected, and it can take a long time (30-60 seconds) for the device to acquire the signal and calculate a position. Wi-Fi location is used in conjunction with GPS signals to more accurately locate a user based on the known location of Wi-Fi transmitters, which are fairly ubiquitous in urban and suburban locations. Apple's iBeacon technology uses Bluetooth low energy (BLE), which uses less battery power than traditional Bluetooth or GPS and is more accurate than targeting through Wi-Fi triangulation. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.4: Understand the capabilities of location-based local marketing.

85) Why is location-based mobile marketing so attractive to marketers? What are some of the current challenges facing location-based marketing? Answer: Consumers who seek information about local businesses using mobile devices are much more active and ready to purchase than desktop users. In part this is because desktop searchers for local information are not in as close proximity to merchants as mobile searchers. A Google survey found more than 80% of U.S. consumers use smartphones or tablet computers to conduct local searches on search engines for a variety of local information such as business hours, local store addresses and directions, and availability of products at local stores. The survey found that consumers search for local information through the purchase process, and 50% of smartphone users visited a store within a day of their local search, and 18% made a purchase within a day. Marketers are increasing their use of location data in order to be able to better target their ads and to enhance audience engagement, customer experience, and audience segmentation. However, location-based marketing is facing some significant challenges entering into the new decade, due to privacy concerns and new laws and regulations such as the California Consumer Privacy Act (CCPA) and California Right to Privacy Act (CRPA). Consumers have become more aware of location-based advertising, and while surveys indicate consumers appreciate the usefulness of such advertising, many find it "creepy." Operating system updates by Apple, such as its App Tracking Transparency (ATT) program and App Privacy Reports and Google have added more user controls, restricting the collection of location data by apps, and making data that is available more costly. Marketers are going to have to adjust to the new environment, reducing reliance on third-party data and being more transparent about collection methods and uses. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 7.4: Understand the capabilities of location-based local marketing. E-commerce 2023, 17e (Laudon/Traver) Chapter 8 Ethical, Social, and Political Issues in E-commerce 1) Which of the following e-commerce technology dimensions creates greater opportunities for cyberbullying? A) information density B) interactivity C) social technology D) ubiquity Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 2) Which of the following e-commerce technology dimensions has the potential to reduce cultural diversity in products? A) ubiquity B) interactivity C) information density D) global reach Answer: D Difficulty: Moderate AACSB: Application of knowledge 170 Copyright © 2024 Pearson Education, Inc.

Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 3) Which of the following is not one of the four basic principles shared by ethical schools of thought in western culture? A) accountability B) privacy C) responsibility D) liability Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues.

4) What is the first step in analyzing an ethical dilemma? A) Define the conflict or dilemma and identify the higher-order values involved. B) Identify the potential consequences of your opinions. C) Identify the options you can reasonably take. D) Identify and describe the facts. Answer: D Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 5) Which ethical principle states that, when confronted with an ethical dilemma, individuals should take the action that achieves the greater value for all of society? A) The Golden Rule B) Risk Aversion Principle C) Collective Utilitarian Principle D) The Social Contract Rule Answer: C Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 6) Which ethical principle emphasizes putting oneself into the place of others and thinking of oneself as the object of the decision? A) The Golden Rule B) Universalism C) Collective Utilitarian principle D) The Social Contract Rule Answer: A Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 7) Which ethical principle asks you to assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise? A) The Golden Rule B) Slippery Slope C) The Social Contract Rule D) No Free Lunch Answer: D Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 8) Which ethical principle states that if an action cannot be taken repeatedly, then it's not right to take at all? A) Universalism B) Slippery Slope 172 Copyright © 2024 Pearson Education, Inc.

C) The Social Contract Rule D) The Golden Rule Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 9) Which ethical principle asks you to consider the impact of your decision if the principles underlying your decision became an organizing principle of the entire society? A) The Golden Rule B) Risk Aversion C) Slippery Slope D) The Social Contract Rule Answer: D Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 10) Which ethical principle tells you that it is wise to assume perfect information markets? A) The Golden Rule B) The New York Times Test C) The Social Contract Rule D) The Collective Utilitarian Principle Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 11) Which ethical principle states that when confronted with an ethical dilemma, an individual should take the action that produces the least harm, or the least potential cost? A) Slippery Slope B) Risk Aversion C) No Free Lunch D) The Collective Utilitarian Principle Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 12) A social consequence of the richness of Internet information is: A) an increase in shallowness. B) an increase in the ease of creating misleading information. C) very persuasive messages might reduce the need for multiple independent sources of information. D) an increase in vulnerability to hacking attacks. Answer: C Difficulty: Difficult 173 Copyright © 2024 Pearson Education, Inc.

AACSB: Application of knowledge Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 13) Downloading a music track owned by a record company without paying for it is an example of a violation of: A) patent law. B) copyright law. C) trademark law. D) privacy law. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 14) Which of the following features of e-commerce technology can result in work and shopping invading family life? A) interactivity B) ubiquity C) information density D) global reach Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 15) Liability is a feature of political systems in which a body of law is in place that permits individuals to recover damages done to them by other actors, systems, or organizations. Answer: TRUE Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues.

16) The principle of responsibility means that individuals, organizations, and societies should be held accountable to others for the consequences of their actions. Answer: FALSE Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 17) The ethical principle of Universalism states that if an action is not right for all situations, then it is not right for any situation. Answer: TRUE Difficulty: Moderate AACSB: Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 18) Describe in depth one ethical, social, or political issue that is presently in the news surrounding the Internet and e-commerce. Answer: A student might answer this issue by focusing on any one of a number of ethical, social, or political issues currently surrounding the Internet and e-commerce. Possible topics include privacy issues, intellectual property rights issues (copyright, patents, or trademarks), taxation, Internet governance issues such as net neutrality and the impact of "Big Tech," and Internet public safety and welfare issues such as the regulation of online pornography, gambling, or the sale of drugs, among others. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues.

19) Describe the five-step process that can be used to analyze an ethical dilemma. What other guidelines are there to help in understanding a complicated ethical or moral situation? Answer: The five-step process is: 1. Identify and clearly describe the facts. Find out who did what to whom, and where, when, and how. It helps to get the opposing parties involved in an ethical dilemma to agree on the facts. 2. Define the conflict or dilemma and identify the higher-order values involved. Ethical, social, and political issues always reference higher values. The parties to a dispute all typically claim to be pursuing higher values (e.g., freedom, privacy, protection of property, and the free enterprise system). 3. Identify the stakeholders. Every ethical, social, and political issue has stakeholders: participants who have an interest in the outcome, who have invested in the situation, and usually who have vocal opinions. Find out the identity of these groups and what they want. This will be useful later when designing a solution. 4. Identify the options that you can reasonably take. You may find that none of the options satisfies all the interests involved, but that some options do a better job than others. Sometimes, arriving at a "good" or ethical solution may not always be a balancing of consequences to stakeholders. 5. Identify the potential consequences of your options. Some options may be ethically correct, but disastrous from other points of view. Other options may work in this one instance, but not in other similar instances. Always ask yourself, "What if I choose this option consistently over time?" Other things to consider when appraising an ethical dilemma include basic ethical concepts such as responsibility, accountability, liability, and due process, and how these play into the situation. Additionally, you can judge the situation against candidate ethical principles, such as the Golden Rule, Universalism, the Slippery Slope, the Collective Utilitarian principle, Risk Aversion, No Free Lunch, the New York Times test (Perfect Information Rule), and the Social Contract rule. Actions that do not easily pass these guidelines deserve some very close attention and a great deal of caution because the appearance of unethical behavior may do as much harm to you and your company as the actual behavior. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication; Ethical understanding and reasoning Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues. 20) Which of the following basic ethical concepts plays an important role in defining privacy? A) responsibility B) accountability C) liability D) due process Answer: D Difficulty: Difficult AACSB: Ethical understanding and reasoning Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 21) Which of the following was the first federal statute defining the privacy rights of a citizen 176 Copyright © 2024 Pearson Education, Inc.

vis-à-vis federal government record systems? A) Freedom of Information Act B) Privacy Act C) Electronic Communications Privacy Act D) Computer Matching and Privacy Act Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 22) Which of the following is used to track individuals as they move among thousands of websites? A) first-party cookies B) digital wallets C) advertising networks D) shopping carts Answer: C Difficulty: Moderate AACSB: Information technology Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 23) Which of the following uses software installed at the ISP level to track user clickstream behavior? A) shopping carts B) trusted computing environments C) deep packet inspection D) DRM Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

24) Which of the following statements about industry self-regulation regarding privacy is not true? A) The AdChoices program is an industry-sponsored initiative to encourage websites to be more transparent about how they use personal information and to make it more likely that appropriate ads are shown to users. B) The Network Advertising Initiative offers consumers a global opt-out feature to prevent network advertising agencies from placing cookies on a user's computer. C) Industry efforts have not so far succeeded in reducing American fears of privacy invasion. D) Online seal programs that attest to a company's privacy policies have had a significant impact on online privacy practices. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 25) Which of the following states has led the way in the development of consumer-related data privacy legislation? A) California B) New York C) Colorado D) Virginia Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 26) Which of the following requires financial institutions to inform consumers of their privacy policies and permits consumers some control over their records? A) Freedom of Information Act B) Gramm-Leach-Bliley Act C) COPPA D) HIPAA Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

27) Which of the following is a core Fair Information Practices (FIP) principle? A) Choice/Consent B) Access/Participation C) Security D) Enforcement Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 28) Which of the FTC's Fair Information Practices (FIP) principles requires identification of the collector of data? A) Notice/Awareness B) Choice/Consent C) Access/Participation D) Security Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 29) Which of the FTC's Fair Information Practices (FIP) principles requires opt-in or opt-out policies to be in place? A) Notice/Awareness B) Choice/Consent C) Access/Participation D) Security Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

30) What is the FTC recommendation regarding choice as it relates to personally identifiable information (PII)? A) Require firms to have consumers affirmatively opt-in before PII is collected. B) Require firms to allow consumers to opt-out before PII is collected. C) Make the collection of PII illegal. D) Require robust notice only before PII is collected. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 31) "Do Not Track" falls under which of the following principles in the FTC's current privacy framework? A) Privacy by Design B) Simplified Choice C) Greater Transparency D) Scope Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 32) Which of the following technologies reduces the ability to merge different files and de-anonymize consumer data? A) anonymous surfing B) anonymous remailers C) differential privacy software D) public key encryption Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

33) All of the following are privacy default browsers except: A) Epic B) DuckDuckGo C) Digi.me D) Brave Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 34) All of the following are private-sector commercial data brokers except: A) Acxiom B) Experian C) Apple D) TransUnion Corporation Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 35) Which of the following statements about the General Data Protection Regulation (GDPR) is not true? A) The GDPR replaces the Data Protection Directive. B) The GDPR applies to any firm operating in any E.U. country. C) The GDPR eliminate the right to be forgotten. D) The GDPR limits the ability of companies to use data for purposes other than those for which it was collected. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

36) The Federal Trade Commission levied a $5 billion fine for privacy violations against which of the following? A) Google B) Facebook C) YouTube D) Zoom Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 37) The California Consumer Privacy Act (CCPA) and the California Privacy Rights and Enforcement Act (CPRA) together do all of the following except: A) give residents the right to be informed about the kind of personal information that is collected about them. B) give residents the right to opt out of the sale of their information. C) give residents the right to access their information in a usable format so they can transfer it to another service. D) give residents the right to prevent government access to their personal information. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 38) In the United States, Google is not required to remove results from its search engine if requested. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 39) The main objective of the European Union's General Data Protection Regulation (GDPR) is to strengthen the rights of citizens to their own personal information and to strengthen oversight of firms to ensure that they implement these individual rights. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 182 Copyright © 2024 Pearson Education, Inc.

40) The opt-in model for informed consent requires an affirmative action by the consumer before a company can collect and use information. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 41) The Federal Communications Commission's privacy rules, applicable to broadband ISPs, were repealed by Congress in 2017. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 42) The Illinois Biometric Information Privacy Act requires firms to have user consent to collect facial information. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 43) Discuss the concept of property rights in personal data as a possible solution to online privacy issues. Answer: One possible solution to online privacy issues is to recognize a property right in personal data, thus enabling individuals to own, control, and receive fair compensation for the use of information about themselves The idea of individuals claiming ownership of their personal data, depositing it into a trusted data store, and then selling that information to third parties is not new, but with the development of supportive digital technologies, today it can be considered a technically feasible approach to some contemporary privacy issues such as control over personal information and transparency. A variety of firms, such as Digi.me, Meeco.me, and CitizenMe, have sprung up to enable users to reclaim control over their personal information and monetize their information by selling it to third-party firms. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

44) How is it possible to measure the strength of privacy policies? Answer: Very little attention has been paid to measuring the strength of privacy policies for individual companies, comparing them to other companies, and understanding how privacy policies have changed over time at a specific company. However, researchers have developed a measure of privacy policies by applying 10 privacy policy principles when reviewing policies. These principles are as follows: • Can the privacy policy be easily found, reviewed, and understood by users? • Does the privacy policy fully disclose how personal information will and will not be used by the organization? Is information about users ever shared or sold without users' explicit permission? • Can users decide if they want to participate? • Can users decide and actively indicate that they agree to be profiled, tracked, or targeted? • Can users decide how and if their sensitive information is shared? • Are users able to change any information that they input about themselves? • Can users decide who can access their information? • Are users notified promptly if their information is lost, stolen, or improperly accessed? • Can users easily report concerns and get answers? • Do users receive a copy of all disclosures of their information? The dimensions are measured on a four-point scale from 0 to 4 (0 meaning the privacy policy fails to meet the criterion and 4 indicating the criterion was fully achieved). Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 45) Briefly define privacy, information privacy, the right to be forgotten, and informed consent. Answer: Privacy is the moral right of individuals to be left alone, free from surveillance or interference from other individuals including the state. Information privacy includes both the right to prohibit certain information from being collected by either governments or businesses, and the right to control the use of whatever information is collected about you. The core concept is the control of your own personal information. The right to be forgotten is the claim of individuals to be able to edit and delete personal information online. Informed consent means that an individual has knowledge of all the material facts needed to make a rational decision and consent has been given to collect information. In the United States, business firms and government agencies can gather transaction data from the marketplace and use it for other marketing purposes without the informed consent of the individual. In Europe, on the other hand, this is illegal. European businesses can only use transaction data to support the current transaction if they have asked for and received the informed consent of the individual. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.

46) How does Apple's Intelligent Tracking Prevention (ITP) technology work? Answer: Apple's web browser, Safari, already blocked third-party cookies by default but ITP extended that functionality by ensuring that first-party cookies would generally only be available for a 24-hour window after a user visited a site. Thereafter, the cookie could not be used for most forms of tracking, and the cookie was deleted entirely if the user did not visit the site within 30 days. In 2020, Apple started blocking all cookies in Safari that enable cross-site tracking, and since then, Apple has continued to release updated versions that further limit the ability of advertisers to track users. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 8.2: Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 47) All of the following are required for information to be considered a trade secret except: A) it must have commercial value to its owner. B) the owner must have taken steps to protect it. C) it must be unique. D) it must be something that others do not know. Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 48) Which of the following cases has chipped away at the Digital Millennium Copyright Act (DMCA) safe harbor protection? A) Field v. Google, Inc. B) E. & J. Gallo Winery v. Spider Webs Ltd., C) BMG Rights Management v. Cox Communications D) Perfect 10, Inc. v. Amazon.com, Inc. et al. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

49) What is the major reason why the Internet has such potential for destroying traditional conceptions and implementations of intellectual property law? A) the ability to make perfect copies of digital works at little cost B) the anonymous nature of the Internet C) the support for instant peer-to-peer communication D) the use of standards for file formats Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 50) Which of the following protects original forms of expression in a tangible medium? A) trade secret law B) copyright law C) patent law D) trademark law Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 51) How long does copyright protection extend for corporate-owned works? A) 25 years B) 50 years C) 75 years D) 95 years Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 52) Which of the following situations would not qualify for the fair use exception to U.S. copyright law? A) A professor clips a newspaper article just before class and distributes copies of it to his class. B) A journalist quotes a paragraph from a book in a review of the book. C) A student copies a photograph of his favorite band from a website created by the band's record label and places it on the student's personal website. D) Google posts thumbnail images of books in the Google Book Search Project. Answer: C Difficulty: Moderate AACSB: Analytical thinking Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 186 Copyright © 2024 Pearson Education, Inc.

53) All of the following are factors that will be considered in determining whether use of copyrighted material is "fair use" except the: A) nature of the work used. B) amount of the work used. C) market effect of the use. D) free availability of the work on the Web. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 54) All of the following are possible penalties for violating the Digital Millennium Copyright Act (DMCA) except: A) up to ten years imprisonment for a first offense. B) fines up to $500,000 for a first offense. C) fines up to $1 million for a repeat offense. D) restitution to the injured parties for any losses due to infringement. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 55) All of the following statements about the Digital Millennium Copyright Act (DMCA) are true except: A) the DMCA makes it illegal to circumvent technological measures to protect works. B) the DMCA makes Internet Service Providers (ISPs) responsible and accountable for hosting websites or providing services to infringers regardless of whether the ISP is aware of infringement. C) the DMCA requires search engines to block access to infringing sites. D) the DMCA allows libraries to make digital copies of works for internal use only. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

56) Which of the following allows someone to obtain an exclusive monopoly on the ideas behind an invention for a period of time, typically 20 years? A) copyright law B) trade secret law C) patent law D) trademark law Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 57) All of the following statements about patents are true except: A) it is more difficult to obtain a copyright than it is to obtain a patent. B) the four types of inventions protected by patent law are machines, manmade products, compositions of matter, and processing methods. C) computer programs can be patented. D) in order to be patented, an invention must be nonobvious. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 58) Which of the following statements about copyright protection in the European Union is not true? A) The European Union now takes a far less proactive view of copyright protection than does the United States. B) The EU Directive on Copyright in the Digital Single Market became effective in 2019. C) As of 2022, the EU Directive on Copyright in the Digital Single Market has been fully implemented by four EU member states. D) The EU Directive on Copyright in the Digital Single Market reflects European objections to the dominance o U.S. Internet firms such as Google and Meta. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

59) Which of the following is considered one of the most contentious e-commerce patents? A) Acacia Technologies' patent on streaming video media transmission B) Priceline's patent on buyer-driven name your price tools C) Amazon's patent on one-click purchasing D) Google's PageRank patent Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 60) Disputes over federal trademarks involve establishing: A) underlying ideas. B) intent. C) piracy. D) infringement. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 61) Registering a domain name similar or identical to trademarks of others to extort profits from legitimate holders is an example of: A) cybersquatting. B) cyberpiracy. C) framing. D) metatagging. Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 62) Which of the following handles cybersquatting cases under its Uniform Dispute Resolution procedures? A) ICANN B) FTC C) WIPO D) USPTO Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

63) Registering a domain name similar or identical to a trademark of a legitimate site to divert web traffic to the infringing site is an example of: A) keywording. B) cyberpiracy. C) framing. D) metatagging. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 64) Registering the domain name Faceboik.com with the intent to divert web traffic from people misspelling Facebook.com is an example of: A) keywording. B) typosquatting. C) metatagging. D) deep linking. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 65) Which of the following can be patented? A) laws of nature B) natural phenomena C) abstract ideas D) mathematical algorithm that is part of a process that has a useful result Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 66) Which of the following companies has won the largest cybersquatting judgment under the ACPA through 2022? A) Google B) Facebook C) Verizon D) GEICO Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 190 Copyright © 2024 Pearson Education, Inc.

67) Safe harbor provisions of the Digital Millennium Copyright Act (DMCA) were at issue in all the following lawsuits except: A) a lawsuit filed by the Authors Guild and five major publishing companies against Google B) a lawsuit brought by Viacom against YouTube and Google C) BMG Rights Management v. Cox Communications. D) Lenz v. Universal Music Corp. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 68) Which of the following cases was one of the first cases involving the Anticybersquatting Consumer Protection Act (ACPA?) A) Lenz v. Universal Music Corp. B) Field v. Google, Inc., C) Perfect 10, Inc. v. Amazon.com, Inc. et al D) E. & J. Gallo Winery v. Spider Webs Ltd. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 69) Rosetta Stone's lawsuit against Google involved which of the following? A) using trademarks as keywords B) using trademarks in metatags C) typosquatting D) cybersquatting Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 70) All of the following cases involved the doctrine of fair use except: A) BMG Rights Management LLC v. Cox Communications, Inc B) Perfect 10, Inc. v. Amazon.com, Inc. et al. C) Field v. Google, Inc. D) Associated Press v. Meltwater U.S. Holdings, Inc. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

71) Copyright protection protects against others copying the underlying ideas in a work. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 72) Owners of gTLDs have the right to create and sell new domains with the gTLD suffix. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 73) Technology companies are the major proponents of the SMART Copyright Act, a new bill that would put the Library of Congress in charge of designating technical measures to police online infringement. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it.

74) Discuss the Authors Guild's lawsuit against Google with respect to Google's Library Project and explain why the courts ultimately ruled in Google's favor. Answer: Google's Library Project involved an effort by Google to scan all the books in several university and public libraries, and then make snippets and parts of the book available online without receiving permission from the publishers or paying royalties. Google said it would never show a full page, just relevant portions of a page in response to searches. In 2005, the Authors Guild and the large book publishers filed a lawsuit seeking to prevent Google from implementing the Library Project. Google argued that the Library Project constituted fair use of publishers' copyrighted works because it only published snippets. Moreover, Google claimed that it was simply helping libraries do what they are intended to do, namely, lend books. Library lending is considered a fair use following an agreement in the late 1930s with publishers, and such lending was codified into the Copyright Act of 1976. Google claimed that helping libraries make books more available to the public was in the broader public interest and extended existing rights of libraries to encourage book availability. After many years of litigation, a federal court finally ruled in favor of Google, stating that Google's scanning and making snippets of text available to the public was "fair use" under U.S. copyright law. The judge believed the project had a broad public purpose of making it easier for students, researchers, teachers, and the general public to find books, while also preserving consideration for author and publisher rights. The Google project was "transformative" in the court's view, giving books a new character and purpose, making it easier to discover old books, and leading to increased sales. The Supreme Court affirmed the ruling in 2016, and the matter is now settled from a legal perspective. However, in the meantime, the project itself stalled, and efforts to scan libraries' so-called orphan books (books for which the copyright holder could not be identified) have also ended. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 75) Describe the purpose of intellectual property law and outline the main types of intellectual property protection. Answer: The purpose of intellectual property law is to balance two competing interests: the public and the private. The public interest is served by the creation of inventions, works of art, music, literature, and other types of intellectual expression. The private interest is served by rewarding creators of intellectual property with a time-limited monopoly that grants exclusive use to the creator. There are three main types of intellectual property protection: copyright, patent, and trademark law. Copyright law protects original forms of expression such as books, periodicals, and other forms of written expression, art, drawings, photographs, music, movies, performances, and computer programs. Patents grant the owner an exclusive monopoly on the ideas behind an invention for a period of time, typically 20 years. There are four types of inventions for which patents are granted under patent law: machines, manmade products, compositions of matter, and processing methods. Trademark law is used to protect trademarks – marks used to identify and distinguish goods and indicate their source. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 8.3: Understand the various forms of intellectual property and the challenges involved in protecting it. 193 Copyright © 2024 Pearson Education, Inc.

76) Which of the following involves the issue of social control? A) information rights B) governance C) public safety and welfare D) property rights Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 77) Which of the following Supreme Court cases established that states can compel online retailers to collect and remit sales taxes even if they do not have a physical presence within the state? A) South Dakota v. Wayfair B) Riley v. California C) Diamond v. Chakrabarty D) Carpenter v. United States Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 78) Which of the following statements is not true? A) Currently, the United States is in a mixed-mode policy environment with respect to the Internet where self-regulation co-exists with limited government regulation. B) The Internet is technically very difficult to control, monitor, and regulate from a central location. C) Early Internet advocates argued that the Internet was different from all previous technologies. D) Controlling e-commerce also involves regulating the Internet. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 79) Net neutrality refers to the idea that Internet service providers (ISPs), including cable Internet and wireless carriers, should treat all data on the Internet in the same manner, and not discriminate or price differentially by content, protocol, platform, hardware, or application. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 80) Discuss the digital advertising services tax enacted by the state of Maryland. What issues does 194 Copyright © 2024 Pearson Education, Inc.

it raise? Answer: In 2021, the state of Maryland enacted a first-of-its-kind digital advertising services tax, which became effective in January 2022. The tax will be imposed on companies with global gross revenues of more than $100 million and will be based on annual gross revenue derived from digital advertising services provided in Maryland. The amount of "Maryland revenue" is to be calculated by dividing the number of devices within Maryland that access such services by the number of worldwide devices and then multiplying the resulting product by global gross revenues. The tax is currently the subject of multiple lawsuits filed by various industry groups in both state and federal courts, alleging a violation of the ITFA as well as the Commerce and Due Process clauses of the U.S. Constitution. Those who support the legislation argue that the digital advertising is not similar to nondigital advertising and therefore does not violate the ITFA. It is likely to be several years before the fate of the legislation is ultimately decided. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 81) Which of the following is not an e-commerce public safety and welfare issue? A) regulation of gambling B) regulation of cigarette sales C) regulation of pornography D) regulation of taxation Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce. 82) The Children's Internet Protection Act (CIPA) has been struck down by the U.S. Supreme Court as unconstitutional. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce. 83) Section 230 of the Communications Decency Act (CDA) provides immunity for providers and users of interactive computer services (such as ISPs and websites) from being considered a publisher that might be liable for harmful content posted by others. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce.

84) Online gambling is now legal throughout the United States. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce. 85) Discuss the challenges that the Internet, mobile apps, social media, and the metaverse, pose for mental health, particularly that of children and young adults. Answer: The Internet, mobile apps, and social media pose significant challenges to mental health, particularly that of children and young adults. The impact of the increase in screen time and time spent with digital devices during the Covid-19 pandemic has further highlighted this issue. Potential negative impacts include increased exposure to negative online social interactions (cyberbullying, feelings of missing out, and social comparisons); reduced physical activity; sleep disruption; isolation from in-person contact; and the possibility of Internet/social media addiction. For example, researchers have found that the social media content on Instagram can be harmful to mental health, particularly that of teenage girls. The state of California has taken the lead here and passed a landmark law, the California Age-Appropriate Design Code Act, that will require online services likely to be used by minors to consider their physical and mental health in the design of such services. The law will go into effect in 2024. The metaverse is the next frontier, and concerns are already emerging about its potential impact on safety and well-being. The potential impacts on children and adolescents of the metaverse are particularly concerning. Research has shown a myriad of negative effects of social media, from bullying and harassment to self-esteem and body image issues, on children and adolescents. These negative effects are likely to be just as prevalent, if not more so, in the metaverse. For example, one researcher teamed up with the Sesame Street Workshop to use Grover as an avatar. Her findings suggest that young children are more likely to comply with commands from a VR character than commands from the same character in 2-D. The researcher noted that when watching on television, children often would hesitate, look at the researcher, and ask what they were supposed to do. But in VR, the children just did whatever Grover told them to do, without stopping or looking around. Exposure to harmful content on these platforms is another issue. For instance, a study by The Center for Countering Digital Hate found that minors are regularly exposed to graphic sexual content, racist and violent language, bullying and other forms of harassment in various games, such as VRChat, that are accessed via Meta's Oculus VR platform, even though Meta has policies prohibiting these sorts of negative content and behavior. Re-creations of the 2019 Christchurch, New Zealand, shooting that are aimed at children have been found multiple times on the Roblox game platform despite efforts by Roblox to prevent such content. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce. E-commerce 2023, 17e (Laudon/Traver) Chapter 9 Online Retail and Services 1) Which of the following is not a key industry strategic factor? A) synergies B) barriers to entry C) industry value chain D) existence of substitute products 196 Copyright © 2024 Pearson Education, Inc.

Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 2) All of the following are strategic factors that pertain specifically to a firm and its related businesses except: A) core competencies. B) synergies. C) technology. D) power of customers. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 3) The lower the ________ compared to revenue, the higher the gross profit. A) assets B) cost of sales C) gross margin D) operating expenses Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 4) Gross margin is defined as gross profit: A) minus total operating expenses. B) divided by net sales revenues. C) divided by cost of sales. D) minus net income. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm.

5) Which of the following is not categorized as an operating expense? A) the cost of products being sold B) marketing costs C) administrative overhead D) amortization of goodwill Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 6) Operating margin is defined as: A) operating income or loss divided by net sales revenues. B) operating income or loss divided by total operating expenses. C) net sales revenues divided by net income or loss. D) net assets divided by net liabilities. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 7) What is another name for pro forma earnings? A) net margin B) operating income C) earnings before income taxes, depreciation, and amortization (EBITDA) D) generally accepted accounting principles (GAAP) earnings Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 8) Which of the following is not considered a current asset? A) long-term investments B) cash C) accounts receivable D) marketable securities Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm.

9) Current liabilities are debts of the firm that will be due within: A) three months. B) six months. C) one year. D) two years. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 10) For a quick check of a firm's short-term financial health, examine its: A) working capital. B) gross margin. C) long-term debt. D) cost of sales. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 11) Which of the following measures the percentage of sales revenue a firm can retain after all expenses are deducted from gross revenues? A) gross profit B) net margin C) operating margin D) working capital Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 12) Which of the following provides a financial snapshot of a company's assets and liabilities (debts) on a given date? A) working capital B) operating margin C) balance sheet D) gross margin Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 13) The existence of substitute products is a key industry strategic factor. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 199 Copyright © 2024 Pearson Education, Inc.

14) Define the term economic viability and explain the factors involved in assessing a firm's economic viability. Answer: Economic viability refers to the ability of a firm to survive during a specified time period as a profitable business firm. To analyze the economic viability of a firm, both strategic and financial assessments are conducted. Strategic approaches to economic viability focus on both the industry in which a firm operates and the firm itself. Industry factors to examine include barriers to entry, which are expenses such as high capital costs, or intellectual property such as patents or copyrights held by other firms and make it difficult for new entrants to join the industry. The power of the suppliers and the power of the customers in the industry must also be considered. If suppliers are sufficiently powerful, they can charge higher prices, whereas if the manufacturers or retailers are more powerful, they can bargain effectively for lower prices from their suppliers. The relative power of the customers determines whether they will be able to shop among the firm's competitors, thus keeping prices down. The existence of substitute products in an industry can also drive prices down if consumers have access to products with a similar function that they determine will fill their needs just as adequately. The industry value chain must be evaluated to determine if the chain of production and distribution for the industry is changing in ways that will benefit or harm the firm. Finally, the nature of the intra-industry competition must be evaluated to determine if the competition within the industry is based on differentiated products and services, price, the scope of the offerings or the focus of the offerings, and whether any imminent changes in the nature of the competition will benefit or harm the firm. The strategic factors to analyze include the firm value chain, the core competencies of the firm, the synergies available to the firm, the technology used by the firm, and the social and legal challenges facing the firm. The firm value chain must be evaluated to determine if the firm has adopted business systems that will enable it to operate at peak efficiency and whether there are any looming technological changes that might force the firm to change its processes or methods. The core competencies of a firm are its unique skills that cannot be easily duplicated. When analyzing the economic viability of a firm it is important to consider whether technological changes might invalidate these competencies. Synergies refer to the availability to the firm of the competencies and assets of related firms that it owns or with which it has formed strategic partnerships. The firm's current technology must be evaluated to determine if it has proprietary technologies that will allow it to scale with demand and if it has developed the customer relationship, fulfillment, supply chain management, and human resources systems that it will need to be viable. Finally, the social and legal challenges facing the firm should be examined to determine if the firm has considered consumer trust issues such as the privacy and security of personal information and if the firm may be vulnerable to legal challenges. The financial factors to analyze are the firm's revenues, cost of sales, gross margin, operating expenses, operating margin, and net margin. Revenues must be examined to determine if they are growing and at what rate. Cost of sales is the cost of the products sold including all related costs.

The lower the cost of sales compared to revenue, the higher the gross profit. Gross margin is calculated by dividing gross profit by net sales. If the gross margin is improving consistently, the economic outlook for the firm is enhanced. Operating expenses such as marketing, technology, and administrative costs should be evaluated to determine if the firm's needs in the near interim will necessitate increased outlays. Large increases in operating expenses may result in net losses for the firm. Operating margin tells us if the firm's current operations are covering its operating expenses, not including interest expenses and other non-operating expenses. Net margin is calculated by dividing net income or net loss by net sales. It evaluates the net profit or loss for each dollar in sales. For example, a net margin of 12% indicates that a firm is making 12 cents on each dollar in sales. These figures can be found on a firm's consolidated statement of operations and summary balance sheet. A thorough strategic and financial analysis will often reveal the true economic prospects for a firm in the near to medium term. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.1: Explain how to analyze the economic viability of an online firm. 15) Which of the following is not a major trend in online retail for 2022-2023? A) Buying online has become a normal, mainstream, everyday experience. B) The average annual purchase of online buyers continues to increase. C) The number of online buyers continues to increase. D) The Covid-19 pandemic decreased e-commerce retail purchasing. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 16) The online retail sector of the retail industry is most similar to the ________ sector. A) specialty stores B) general merchandise C) mail order/telephone order (MOTO) D) consumer durables Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today.

17) Which of the following is not one of the seven major segments of the retail industry? A) electronics and computers B) specialty stores C) gasoline and fuel D) food and beverage Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 18) Which of the following threatens to slow e-commerce growth? A) consumer interest in sustainability B) economic conditions, including rising inflation C) the increase in BOPIS functionality D) the increased use of subscription-based boxes by omnichannel merchants Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 19) Which of the following is not a fundamental condition for success in retail? A) Having a central location in order to attract a large number of shoppers. B) Charging high enough prices to cover the costs of goods and marketing. C) Developing highly efficient inventory and fulfillment systems. D) Spending a large amount on customer acquisition and marketing. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 20) All of the following were parts of the vision during the early days of e-commerce except the belief that: A) new, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business. B) online consumers were rational and cost-driven. C) entry costs to the online retail market would be much less than those needed to establish a physical storefront. D) the cost of acquiring customers would be much lower. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 202 Copyright © 2024 Pearson Education, Inc.

21) All of the following are online platforms that enable online retail operations by small and medium-sized businesses, except: A) Shopify. B) eBay. C) Etsy. D) Target. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 22) In 2022, more than ________ of the U.S. population are online buyers. A) 45% B) 55% C) 65% D) 75% Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 23) Which of the following categories generated the highest percentage of online retail revenue in 2021? A) computers and electronics B) apparel and accessories C) books/music/video D) automobile and automobile parts and accessories Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 24) All of the following are advantages of online retail except: A) lower supply chain costs. B) lower cost of distribution. C) ability to change prices. D) faster delivery of goods. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today.

25) Which of the following is not one of the central challenges facing the online retail industry? A) lack of physical store presence B) consumer concerns about the privacy of personal information C) inconvenience in returning goods D) delivery delays Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 26) Which of the following is not one of the methods used by traditional retailers to develop omnichannel integration? A) online catalog B) online order, in-store pickup C) online supply-push D) online promotions for offline purchases Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 27) U.S. retail m-commerce is expected to generate about $________ in 2022. A) $41.5 million B) $415 million C) $41.5 billion D) $415 billion Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 28) Which of the following is the most commonly used platform by social buyers? A) Instagram B) Facebook C) TikTok D) Pinterest Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today.

29) Online retail constitutes about 25% of the total retail market today. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 30) In 2022, the number of online buyers in the United States was around 215 million. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 31) Personal consumption of retail goods and services accounts for over 80% of total gross domestic product (GDP). Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 32) Contrary to predictions of analysts made during the early days of e-commerce, the Internet has led to both disintermediation and hypermediation on a widespread basis. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 33) Consumers are primarily price-driven when shopping on the Internet. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 34) Online retailing provides an example of the powerful role that intermediaries continue to play in retail trade. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.2: Understand the environment in which the online retail sector operates today.

35) Describe the vision of online retailing during the early days of e-commerce. Did these predictions and assumptions turn out to be true? Answer: In the early years of e-commerce, thousands of entrepreneurial web-based retailers were drawn to the marketplace for retail goods, simply because it was one of the largest market opportunities in the U.S. economy. Many entrepreneurs initially believed it was easy to enter the retail market. Early writers predicted that the retail industry would be revolutionized, literally "blown to bits"–as prophesied by Evans and Wurster, two consultants in a famous Harvard Business School book. The basis of this revolution would be fourfold. First, because the Internet greatly reduced both search costs and transaction costs, consumers would use the Web to find the lowest-cost products. Several results would follow. Consumers would increasingly drift to the Web for shopping and purchasing, and only low-cost, high-service, quality online retail merchants would survive. Economists assumed that the online consumer was rational and cost-driven–not driven by perceived value or brand, both of which are nonrational factors. Second, it was assumed that the entry costs to the online retail market were much less than those needed to establish physical storefronts, and that online merchants were inherently more efficient at marketing and order fulfillment than offline stores. The costs of establishing a powerful website were thought to be minuscule compared to the costs of warehouses, fulfillment centers, and physical stores. There would be no difficulty building sophisticated order entry, shopping cart, and fulfillment systems because this technology was well known, and the cost of technology was falling by 50% each year. Even the cost of acquiring consumers was thought to be much lower because of search engines that could almost instantly connect customers to online vendors. Third, as prices fell, traditional offline physical store merchants would be forced out of business. New entrepreneurial companies–such as Amazon–would replace the traditional stores. It was thought that if online merchants grew very quickly, they would have first-mover advantages and lock out the older traditional firms that were too slow to enter the online market. Fourth, in some industries–such as electronics, apparel, and digital content–the market would be disintermediated as manufacturers or their distributors entered to build a direct relationship with the consumer, destroying the retail intermediaries or middlemen. In this scenario, traditional retail channels–such as physical stores, salesclerks, and sales forces–would be replaced by a single dominant channel: the Web. Many predicted, on the other hand, a kind of hypermediation based on the concept of a virtual firm in which online retailers would gain an advantage over established offline merchants by building an online brand name that attracted millions of customers and outsourcing the expensive warehousing and order fulfillment functions–the original concept of Amazon.

As it turned out, few of these assumptions and visions were correct, and the structure of the retail marketplace in the United States, with some notable exceptions, has not been blown to bits, disintermediated, or revolutionized in the traditional meaning of the word "revolution." In 2022, after more than 25 years of e-commerce expansion, retail e-commerce is still only expected to account for just 15% of total retail sales in the United States. With several notable exceptions, online retail has often not been successful as an independent platform on which to build a successful online-only business. Many of the first mover, online-only merchants failed to achieve profitability and closed their doors en masse as their venture capital funds were depleted. There are a number of reasons for the difficulties experienced by many online retailers in achieving profits. The path to success in any form of retail involves having a central location in order to attract a large number of shoppers, charging high enough prices to cover the costs of goods as well as marketing, and developing highly efficient inventory and fulfillment systems so that the company can offer goods at lower costs than competitors and still make a profit. Many of the early online merchants failed to follow these fundamental ideas, lowering prices below the total costs of goods and operations, failing to develop efficient business processes, failing to attract a large enough audience to their websites, and spending far too much on customer acquisition and marketing. Today, the lessons of the past have been learned, and far fewer online merchants are selling below cost, especially if they are startup companies. There's also been a change in consumer culture and attitudes. Whereas in the past consumers looked online for inexpensive prices, today, they look to online purchasing for convenience, time savings, and time shifting (buying retail goods at night from the sofa). Consumers have been willing to accept higher prices in return for the convenience of shopping online and avoiding the inconvenience of shopping at stores and malls. This allows online merchants more pricing freedom. As it turns out, the consumer is not primarily price-driven when shopping on the Internet but instead considers brand name, trust, reliability, delivery time, convenience, ease of use, and above all "the experience," as at least as important as price. On the other hand, as predicted, online retail has indeed become the fastest growing and most dynamic retail channel in the sense of channel innovation. The Web has created a new marketplace for millions of consumers to conveniently shop. The Internet and the Web have continued to provide new opportunities for entirely new firms using new business models and new online products. The Internet has also created an entirely new venue for omnichannel firms (those that sell products through a variety of channels and integrate their physical stores with their websites and mobile platform). Traditional retailers have been the fast followers (although many of them cannot be characterized as particularly "fast") and are succeeding online by extending their traditional brands, competencies, and assets. In this sense, e-commerce technological innovation is following the historical pattern of other technology-driven commercial changes, from automobiles to radio and television, where an explosion of startup firms attracts significant investment, but the firms quickly fail and are consolidated into larger existing firms. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.2: Understand the environment in which the online retail sector operates today.

36) How did the Covid-19 pandemic change the automobile and automobile parts and accessories online retail category? Answer: Prior to the Covid-19 pandemic, consumers interested in purchasing a car primarily used the Web to conduct product and pricing research, which they then used to negotiate with dealers, and most e-commerce revenues were generated by the sale of car accessories and car parts. However, the pandemic increased demand for automobiles, particularly used cars. Digitally native direct-to-consumer companies such as Carvana and Vroom have leveraged this demand to disrupt the used car market. For example, Carvana's U.S. e-commerce sales more than doubled in 2021, to almost $13 billion, and are expected to grow to almost $20 billion in 2022, pushing it into the top 10 e-commerce companies in terms of U.S. e-commerce sales. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.2: Understand the environment in which the online retail sector operates today. 37) Which of the following is not a digitally native vertical brand (D2C)? A) Warby Parker B) Wayfair C) Everlane D) Casper Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 38) Which of the following is not an example of a virtual merchant? A) Overstock B) Wayfair C) Newegg D) Dell Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 39) Omnichannel merchants are also referred to as: A) virtual merchants. B) bricks-and-clicks companies. C) catalog merchants. D) manufacturer-direct firms. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 208 Copyright © 2024 Pearson Education, Inc.

40) Which of the following is a subscription-based retailer using predictive marketing and big data? A) Macy's B) Stitch Fix C) Dell D) Lands' End Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 41) Virtual merchants face potentially large costs for all of the following except: A) building and maintaining a website. B) building and maintaining physical stores. C) building an order fulfillment infrastructure. D) developing a brand name. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 42) All of the following statements about Amazon are true except: A) Amazon purchased Jet.com, one of its discount competitors, to give it a more robust network for delivering goods. B) Amazon Web Services delivers more profits than Amazon's entire retail business. C) eBay can be considered a competitor of Amazon's. D) Amazon generates the bulk of its overall revenue by selling products. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 43) All of the following are challenges faced by bricks-and-clicks firms except: A) coordinating prices across channels. B) handling returns of online purchases at retail outlets. C) building a credible website. D) building a brand name. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 209 Copyright © 2024 Pearson Education, Inc.

44) All of the following are challenges for catalog merchants except: A) high costs of printing and mailing. B) building a credible website. C) the need to bring staff in or manage new technology. D) building sophisticated order entry and fulfillment systems. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 45) The term supply-push refers to: A) making products prior to orders being received based on estimated demand. B) waiting for orders to be received before building a product. C) channel conflict. D) multi-channel manufacturers who sell directly online to consumers. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 46) All of the following are examples of the challenges that traditional manufacturers experience when using the Internet to sell directly to the consumer except: A) moving to a demand-pull model. B) high-cost structures. C) developing a fast-response online order and fulfillment system. D) channel conflict. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 47) Which of the following occurs when retailers of products must compete on price and currency of inventory directly against the manufacturer? A) disintermediation B) localization C) channel conflict D) hypermediation Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces.

48) Which of the following has the highest share of online retail sales? A) omnichannel merchants B) virtual merchants C) catalog merchants D) manufacturer-direct Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 49) Which of the following has the second-highest share of online retail sales? A) omnichannel merchants B) virtual merchants C) catalog merchants D) manufacturer-direct Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 50) Big data plays an important role in predictive marketing. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 51) What are some of the challenges faced by manufacturer-direct firms? Answer: Manufacturer-direct (also sometimes referred to as direct-to-consumer [DTC or D2C]) firms are either single- or multi-channel manufacturers that sell directly online to consumers without the intervention of retailers. Manufacturer-direct firms sometimes face channel conflict challenges. Channel conflict occurs when retailers of products must compete on price and currency of inventory directly against the manufacturer, who does not face the costs of maintaining inventory, physical stores, or sales staffs. Firms with no prior direct marketing experience face the additional challenges of developing a fast-response online order and fulfillment system, acquiring customers, and coordinating their supply chains with market demand. Switching from a supply-push model (where products are made prior to orders received based on estimated demand and then stored in warehouses awaiting sale) to a demand-pull model (where products are not built until an order is received) has proved extremely difficult for traditional manufacturers. . Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 211 Copyright © 2024 Pearson Education, Inc.

52) Describe the virtual merchant business model and its unique challenges in becoming financially viable. Answer: Virtual merchants are e-commerce firms that generate almost all their revenue from online sales. They face a number of strategic challenges. They must build a business and brand name from scratch quickly and face other virtual merchant competitors. They also face large costs in building and maintaining an e-commerce presence, building an order fulfillment infrastructure, and developing a brand name. Customer acquisition costs are high, and the learning curve is steep. Like all retail firms, their gross margins are low. Therefore, virtual merchants must achieve highly efficient operations to preserve a profit, while building a brand name as quickly as possible in order to attract a sufficient number of customers to cover their costs of operations. Most merchants in this category adopt low-cost and convenience strategies, coupled with extremely effective and efficient fulfillment processes to ensure customers receive what they ordered as fast as possible. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.3: Identify the primary types of online retailers and understand the different challenges each type faces. 53) In the United States, the service sector accounts for approximately ________% of the United States GDP. A) 70 B) 75 C) 80 D) 85 Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector. 54) Within the major service industry groups, companies can be categorized generally into those that provide transaction brokering and those that involve which of the following? A) retailing goods B) personalization C) information brokering D) providing hands-on services Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector.

55) Approximately ________% of the United States labor force is involved in providing services. A) 50 B) 60 C) 70 D) 80 Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector. 56) Which of the following is not an example of a transaction broker? A) a stockbroker B) a real estate agent C) an accountant D) an employment agency Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector. 57) All of the following services require extensive personalization except: A) financial services. B) legal services. C) medical services. D) accounting services. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector. 58) Which of the following best explains why the service sector is a natural avenue for e-commerce? A) The service sector is less geographically reliant and more globally oriented. B) The service sector requires "rich" marketing messages to reach new customers. C) Much of the value in services is based on the collection, storage, and exchange of information. D) It is not; services are difficult to translate to e-commerce because they all rely on face-to-face communication and barter. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector.

59) Service industries (i.e., finance & travel) typically are very knowledge- and information-intense. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.4: Describe the major features of the offline and online service sector. 60) What aspects of Internet and e-commerce technology are undergirding the rapid growth of e-commerce services and how will it impact the growth of such services in the future? Answer: The ability of Internet and e-commerce technology to personalize and customize service, or components of service, is a major factor undergirding the extremely rapid growth of e-commerce services. Future expansion of e-services will depend in part on the ability of e-commerce firms to transform their customized services–choosing from a list–into truly personalized services, such as providing unique advice and consultation based on a digital yet intimate understanding of the client (at least as intimate as professional service providers). Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 9.4: Describe the major features of the offline and online service sector. 61) Which of the following statements about online banking is not true? A) The top U.S. banks are all large national banks that also offer online banking. B) The Covid-19 pandemic significantly boosted the number of online banking users. C) Millennials and Gen Z-ers are adopting mobile banking at a much higher rate than those who are older. D) More people use a tablet for mobile banking than a mobile phone. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 62) Which of the following is an example of an insurtech company? A) Lemonade B) Prosper C) Opendoor D) Betterment Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry.

63) The Internet has resulted in lower search costs, increased price comparison, and lower prices to consumers for which insurance product line? A) term life insurance B) automobile insurance C) health insurance D) property and casualty insurance Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 64) All of the following statements about the online insurance industry are true except: A) the preference for purchasing insurance in-person compared to online has increased over the years. B) more than 50% of consumers use social media to gather information about insurance companies and advisors. C) the wave of interest in fintech companies is starting to filter into the insurance industry. D) the industry has been very successful in attracting visitors searching for information about prices and terms of insurance policies. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 65) All of the following statements about the online real estate services market are true except: A) the first step in the home buying process for nearly all ages of home buyers is to look online. B) the major impact of Internet real estate sites has been in influencing offline decisions. C) the primary service offered by real estate sites is a listing of houses available. D) the Internet and e-commerce have created a revolution in the real estate value chain. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 66) Which of the following is an example of a robo-advisor? A) Betterment B) Commonstock C) Robinhood D) Public Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 67) In 2022, almost 80% of the adult U.S. population was expected to use online banking. Answer: TRUE Difficulty: Moderate 215 Copyright © 2024 Pearson Education, Inc.

AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 68) The online mortgage industry has transformed the process of obtaining a mortgage. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 69) The term fintech applies only to tech companies that are seeking use technology to unbundle traditional institutional financial services industries and instead deliver targeted solutions. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry. 70) Define the term neobank and give an example. Answer: A neobank is an independent, digitally native, digital only bank. Chime is the leading example of a neobank Chime offers an FDIC-insured checking and savings account, and a Visa debit card backed by The Bancorp Bank and has more than 18 million U.S. users as of 2022. Chime targets low-to-middle-income consumers with features aimed at building financial health. Other examples include Aspiration and Revolut. Aspiration bills itself as an "anti-bank" with a sustainability focus. It offers a suite of banking services, credit cards, and investment products that aim to be carbon-neutral. However, some critics have questioned how well it is living up to its claims. Revolut, a U.K. fintech that launched in the United States in 2020 and has more than 20 million users worldwide, offers an app that enables users to manage their finances all in one place, as well as access to over 55,000 surcharge-free ATMs around the world. .TOPIC Difficult Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.5: Discuss the trends taking place in the online financial services industry.

71) ________ provides notices called Consumer Alerts to inform readers when a review is likely to be fraudulent. A) Yelp B) TripAdvisor C) Angie's List D) TripExpert Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.6: Describe the major trends in the online travel services industry today. 72) What is the largest sector of the online travel services market in terms of revenue? A) hotel reservations B) car reservations C) cruise/tour reservations D) airline reservations Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.6: Describe the major trends in the online travel services industry today. 73) Which of the following statements is not true? A) Price competition among online travel services is difficult as comparison shopping for better prices is easy. B) The online travel services sector is one of the few in which extensive disintermediation has occurred. C) The ability of travel products and services to be commoditized is a significant factor in the explosive growth of the online travel services industry. D) The online travel services industry has gone through a period of consolidation. Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 9.6: Describe the major trends in the online travel services industry today. 74) Booking Holdings owns all of the following except: A) Priceline. B) Expedia. C) Booking.com D) Kayak Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.6: Describe the major trends in the online travel services industry today.

75) The Covid-19 pandemic had a much more negative impact on the online travel industry than it did on the online retail industry. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.6: Describe the major trends in the online travel services industry today. 76) Discuss the issue of consolidation in the online travel services industry. Answer: The online travel services industry has gone through a period of intense consolidation. Expedia now owns Travelocity, Orbitz, CheapTickets, Hotels.com, Hotwire, HomeAway, and Trivago. Its primary competition consists of Booking Holdings, which owns Priceline, Booking.com, and Kayak. Together, Expedia and Booking Holdings control a whopping 95% of the online travel agency booking market. However, Google is also a player in this marketspace, with its Google Flights that also provides booking functionality. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 9.6: Describe the major trends in the online travel services industry today. 77) Which of the following job recruitment companies is not a job listing aggregator? A) Indeed B) SimplyHired C) Glassdoor D) CareerBuilder Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.7: Identify current trends in the online job recruitment and career services industry. 78) Which of the following is not a major trend in the online job recruitment and career services industry? A) disintermediation B) video and remote recruiting C) social recruiting D) use of artificial intelligence technologies in the hiring process Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.7: Identify current trends in the online job recruitment and career services industry. 79) The social network LinkedIn has become a major player in the online recruitment market. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.7: Identify current trends in the online job recruitment and career services industry. 218 Copyright © 2024 Pearson Education, Inc.

80) Explain why online job recruiting and career services are so well suited to the Web. Answer: Next to travel services, job recruiting and career services have been one of the Internet's most successful online services because they save money for both job hunters and employers. Job resumes can be posted for free, many other career-related services can be easily accessed, and for a fee, job hunters can access lists of job openings that have been posted by companies. Online recruiting provides an efficient and cost-effective means of linking employers and job hunters and reduces the total time-to-hire. Job hunters can easily build, update, and distribute their resumes, conduct job searches, and gather information on employers at their convenience and leisure. They can also take skills assessment tests, fill out personality assessment questionnaires, and access such services as personalized account management for job hunters, job search tools, employer blocking tools, organizational culture assessments, and e-mail notifications when an appropriate job is newly listed on the site. Job recruitment is an information-intense business process that the Internet can automate, thus reducing search time and costs for all parties. In addition to matching job applicants with available positions, online sites also serve the larger function of automating this information-intense business process. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 9.7: Identify current trends in the online job recruitment and career services industry. 81) Which of the following is not true about on-demand service firms? A) The growth of on-demand service firms is supported by the use of online reputation systems based on peer review. B) It is not likely that on-demand service firms will totally escape government regulation. C) On-demand service firms facilitate access to resources. D) On-demand service firms are a totally new phenomenon without precedent in the history of e-commerce. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.8: Understand the business models of on-demand service companies. 82) Which of the following is an on-demand service company focused on grocery shopping? A) Uber B) Lyft C) Instacart D) Task Rabbit Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.8: Understand the business models of on-demand service companies.

83) All of the following are terms used to describe on-demand service companies except: A) mesh economy. B) collaborative commerce. C) we-commerce. D) omnichannel commerce. Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 9.8: Understand the business models of on-demand service companies. 84) On-demand service companies collect a fee from both sellers and buyers who use the platform. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 9.8: Understand the business models of on-demand service companies. 85) Describe Airbnb's business model and discuss the challenges that it faces. Answer: Airbnb was founded in 2008 as a way to find lodging for attendees at a business convention. Since then, Airbnb has expanded to the entire lodging marketplace, and has grown exponentially, going public in December 2020 with a valuation of $47 billion. Airbnb now operates in more than 100,000 cities in 220 countries around the world. More than 4 million people with space to rent ("hosts") have signed up. Currently, more than 6 million different properties are available on the platform, ranging from apartments to homes to luxury villas and even castles and Mongolian yurts (In May 2022, Airbnb introduced a major site-wide redesign to make it even easier to find offbeat and niche properties). Since its founding, Airbnb has grown to be larger than the Marriott International, the world's largest private hotel chain, which, in comparison, has around 5,700 hotels, and about 1.1 million rooms under 20 different brands around the world. Hosts create an account and a profile, and then list their properties. The host determines the amount charged, usually based on the host's assessment of similar listings. Airbnb faces significant legal challenges. For example, a number of countries and cities had enacted legislation regulating short-term rentals such as those facilitated by Airbnb. In New York, for instance, Airbnb continues to be hampered by a law that prohibits homes and apartments from being rented out for less than 30 days, unless the host is actually present during the guest's stay. Another New York City law imposes fines on Airbnb hosts who advertise listings that violate this law. In Boston, regulations that took effect in December 2019 require hosts to own their properties and live in them for at least nine months of the year. Airbnb is facing similar battles in other countries, such as Holland, Germany, and Spain. Regulations such as these may have a negative impact on Airbnb's business. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 9.8: Understand the business models of on-demand service companies. E-commerce 2023, 17e (Laudon/Traver) Chapter 10 Online Content and Media 1) Which of the following is not a current trend in online content? A) Online readership of newspapers exceeds print readership. B) The number of people in the United States who watch digital video on subscription-based OTT 220 Copyright © 2024 Pearson Education, Inc.

television services has declined. C) Book publishing revenue remains stable. D) Time spent using digital media vastly exceeds time spent with television. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 2) Cord cutters and cord shavers are shrinking the number of pay TV subscribers yearly by approximately: A) 1%. B) 5%. C) 10%. D) 15%. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 3) Which of the following U.S. media channels generates the most revenue? A) broadcast television/pay TV B) video games C) newspapers D) box office movies Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

4) In 2021, the various entertainment industries together accounted for about ________% of total media industry revenues, while the print media industries collectively accounted for about ________%. A) 23, 77 B) 79, 22 C) 89, 11 D) 11, 89 Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 5) Which of the following statements about Gen-Z is not true? A) Gen Z is the first generation of true digital natives. B) Gen-Zers are more likely than Millennials to listen to podcasts. C) Gen-Zers are spending less time reading books than previous generations. D) More than 90% of Gen-Zers are online. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 6) In 2022, time spent with digital media in the United States accounted for ________ of total media time spent. A) 42% B) 52% C) 62% D) 72% Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

7) Which of the following types of online content is consumed by the highest percentage of U.S. Internet users? A) digital audio B) video C) digital games D) e-books Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 8) All of the following are examples of technology convergence except: A) the iPad. B) Amazon Books Publishing. C) Apple TV. D) smartphones. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 9) All of the following are aspects of content convergence except: A) language. B) design. C) production. D) distribution. Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

10) Which of the following occurs first in the process of content convergence related to books? A) media integration B) media migration C) media transformation D) media maturity Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 11) Which of the following is not an example of industry structure convergence? A) Amazon's creation of Amazon Books Publishing B) Comcast's purchase of a majority interest in NBCUniversal C) AT&T's merger with Time Warner D) Apple's development of the iPad Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 12) Which of the following types of online content is consumed by the lowest percentage of U.S. Internet users? A) e-books B) magazines C) video D) digital audio Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

13) The merger of media enterprises into powerful, synergistic combinations that can cross-market content on many different platforms is referred to as: A) aggregation. B) repackaging. C) media transformation. D) industry convergence. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 14) DRM refers to a combination of ________ for protecting digital content. A) hardware and software methods B) technical and legal means C) user and publisher agreements D) local and remote policies Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 15) ________ convergence refers to the development of hybrid devices that can combine the functionality of two or more existing media platforms into a single device. A) Technological B) Content C) Media D) Industry Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

16) Content convergence refers to the convergence in the design, production, and ________ of content. A) sales B) distribution C) marketing D) consumption Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 17) A business model that uses advertising revenue to provide some content for free, combined with an option to obtain additional content for a price is called a(n) ________ model. A) sales B) distribution C) a la carte D) freemium Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 18) YouTube employs a walled garden to protect copyright owners. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 19) The amount of time the average American adult spends consuming media is about two-and-a half times the amount of time spent at work. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

20) The culture of the Internet with respect to expectations about paying for online content began to change when Apple introduced the iPhone. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 21) The video game industry accounts for the second highest percentage of U.S. media revenues. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 22) The time spent on desktop computers and mobile devices now exceeds time spent in front of the television. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 23) The a la carte revenue model allows users to pay only for what they use. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 24) Podcasting revenues are growing rapidly. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

25) Revenue generated by online TV and movies is expected to grow by nearly 20% between 2020 and 2022. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 26) Smartphones are an example of technological convergence. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 27) Cannibalization is a major challenge facing book publishers. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 28) What is DRM and why is it used? Answer: Digital rights management (DRM) refers to a combination of technical (both hardware and software), and legal means for protecting digital content from unlimited reproduction and distribution without permission. DRM hardware and software encrypt content so it cannot be used without some form of authorization, typically based on a payment. The objective is to control the uses of content after it has been sold or rented to consumers. Essentially, DRM can prevent users from purchasing and making copies for widespread distribution over the Internet without compensating the content owners. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

29) Explain the concept of media convergence. Answer: The term media convergence refers to digitally based changes in technology platform, content, and industry structure. Technological convergence involves the development of hybrid devices that can enable the delivery of various types of media via a single device. Content convergence has three dimensions: design, production, and distribution. Content design convergence occurs as content created in an older media technology is transferred into a new technology. Historically the initial transference involves little artistic change, but as the artists and producers learn how to use the new tools and how to deliver content more efficiently in the new media, the new capabilities can be fully exploited, and the art becomes measurably different. Content production convergence occurs when content, which is the most significant cost of content, is developed only once using technology that can deliver it to multiple different platforms. Production convergence drives content convergence as new tools are developed for economically producing content for delivery to multiple platforms. For example, the text produced in a word processing program can be easily converted to an HTML or PDF file for online delivery. Distribution convergence occurs when the distributors and ultimate consumers have the devices needed to receive, store, and experience the product. Industry convergence refers to the merger of media enterprises into powerful synergistic combinations that can cross-market content on many different platforms and create new works that use multiple platforms. Traditionally, each type of media – film, text, music, television – had its own separate industry, typically composed of very large players. However, the Internet has created forces that make the merger of traditionally separate firms in separate media industries a plausible – perhaps necessary – business proposition. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 30) Describe the three basic revenue models for digital content delivery. Answer: There are three revenue models for delivering content on the Internet. The two "pay" models are subscription (usually "all you can eat," meaning the amount of content that you can consume is unlimited), and a la carte (pay only for what you use). The third model uses advertising revenue to provide content for free, often with a "freemium" option, which makes additional content available for a cost. In many cases, all three of the models work in tandem and cooperatively: free content can drive customers to paid content, as streaming services like Pandora and Spotify have discovered. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence.

31) Discuss the structure of the U.S. media content industry. Answer: The U.S. media content industry prior to 1990 was composed of many smaller independent businesses specializing in content creation and distribution in the separate industries of film, television, book and magazine publishing, and newspaper publishing. During the 1990s and into the twenty-first century, after an extensive period of consolidation, huge entertainment and publishing media conglomerates have emerged. The U.S. media industry is still organized largely into three separate vertical stovepipes: print, movies, and music. Each segment is dominated by a few key players. Generally, there has been very little crossover from one segment to another. Typically, newspapers do not also produce Hollywood films, and publishing firms do not own newspapers or film production studios. The purchase of the Washington Post in 2013 by Jeff Bezos, the founder of Amazon, and an Internet mogul in his own right, was an anomaly. Even within media conglomerates that span several different media segments, separate divisions control each media segment. Initially, delivery platform firms, such as Comcast, Altice, AT&T, Verizon, Sprint, and Dish Network, did not focus on the creation of content but instead just moved content produced by others across cable, satellite, and telephone networks. However, as revenues from traditional cable Internet and wireless telecommunications slowed, these firms decided that they should try to get into the content/advertising business as well, in an effort to generate additional revenues. Comcast led the way with the acquisition of a majority interest in NBCUniversal. Then, AT&T merged with Time Warner and Verizon purchased both AOL and Yahoo. However, the effort proved much more difficult than anticipated. Within three years of its acquisition of Time Warner, AT&T acknowledged that it was a major mistake, and in 2021, announced a deal with cable network Discovery to combine the assets of WarnerMedia (including HBO and Warner Brothers) with those of Discovery into a new standalone entertainment company, with AT&T returning to its focus to broadband communications. Verizon's acquisition of AOL and Yahoo was also a costly mistake for Verizon, with Verizon selling its media to a private equity group in 2021. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.1: Understand the major trends in the consumption of media and online content, the major revenue models for digital content delivery, digital rights management, and the concept of media convergence. 32) Which of the following statements about the New York Times is not true? A) The New York Times initiated a Digital First model in 2020. B) The New York Times surpassed $1 billion in digital revenues for the first time in 2021. C) The New York Times has more than 6 million digital-only news subscribers as of June 2022. D) The New York Times is using more digital native journalistic forms. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

33) Which of the following has the highest share of the e-book market? A) Amazon B) Apple C) Google D) Barnes & Noble Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 34) Which of the following happened during the time period when newspapers used a print-centric business model? A) Google launched its search engine. B) Apple introduced the iPhone. C) Facebook opened to the public. D) The adoption of smartphones and tablets has grown rapidly. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 35) ________ were the most troubled segment of the print publishing industry in 2022. A) Books B) Magazines C) Newspapers D) Periodicals Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 36) Which of the following statements about the newspaper industry is not true? A) U.S. newspaper revenues totaled about $20 billion in 2021. B) U.S. newspaper print ad revenues have dropped precipitously since 2006. C) Social media has become a major source of visitors to online newspapers. D) Newspaper circulation revenues have declined dramatically since 2002. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

37) Which of the following statements about online magazine publishing is not true? A) The Internet and the Web did not have much impact on magazine sales at first. B) Digital ad revenue has now made up for the decline in print revenue. C) Apple+ News is an example of a magazine aggregator. D) An estimated 220 million people engage with magazine content via print/digital replica editions. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 38) Which of the following statements about The New Yorker magazine is not true? A) The New Yorker has aggressively pursued an online presence on social networks. B) The New Yorker's subscription revenue is now more than 70% of its total revenue. C) The New Yorker's readers are more likely to read the entirety of long stories on their desktops rather than their phones. D) The New Yorker introduced a digital paywall in 2014. Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 39) Which of the following statements about independent bookstores is not true? A) The growth of national bookstore chains such as Barnes & Noble had a negative impact on independent bookstores. B) Many independent bookstores have successfully transformed their legacy business models and technology. C) The fate of independent bookstores remains a major question in the wake of the Covid-19 pandemic. D) The number of independent bookstores declined by almost 50% between 2009 and 2022. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 40) Which of the following is not an example of a native digital news site? A) Huffington Post B) Buzzfeed C) Vice D) USA Today Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

41) Which of the following is the most common model for online newspaper access for U.S. newspapers? A) totally free B) most content free, but subscription fee to access premium content C) paywall D) metered subscription model Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 42) Which of the following statements about the online newspaper audience is not true? A) The online newspaper is one of the most successful of all online media in terms of audience size. B) The number of desktop visitors to online newspapers is increasing. C) People in the age 18 to 34 age group are more likely to read the news online than older people. D) The New York Times attracts the most unique monthly visits of U.S. online newspapers. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 43) Who was the first major fiction writer to create an e-book-only volume of a new work? A) John Grisham B) Stephen King C) Dan Brown D) Amanda Hocking Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 44) Which of the following statements about e-books is not true? A) Most self-published e-books are not counted by the publishing industry reports on e-book sales. B) Apple is a distant second in the e-book market. C) A recent survey found that the percentage of U.S. adults who read an e-book in the previous year is higher than the percentage who read a print book D) The vast majority of indie authors are unable to make a living solely from e-book sales. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

45) Although estimates of e-book revenues vary, some analysts believe that e-book revenues currently represent around ________ of total book publishing revenues? A) 10% B) 20% C) 30% D) 40% Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 46) According to Amazon, around how many indie authors have earned more than $100,000 in royalties from their books? A) 10 B) 100 C) 1,000 D) 10,000 Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 47) ________ was sued by the Justice Department for violating antitrust laws in connection with e-books. A) Amazon B) Google C) Apple D) Barnes & Noble Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 48) When was the future of e-books firmly established? A) in 2000, with the release on Amazon of Stephen King's novella, Riding the Bullet B) in 2007, with the introduction of Amazon's Kindle C) in 2009, when Barnes & Noble introduced its Nook e-reader D) in 2010, when Apple introduced the first iPad Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

49) Which of the following statements about the wholesale and agency models for selling books is not true? A) In the wholesale model, the retailer decides at what price to sell a book to the consumer. B) Amazon surprised traditional publishers by selling e-books for below their wholesale cost. C) Today, each publisher makes an agreement with Amazon about the price of their books. D) A result of the agency model was that Amazon's prices on e-books declined. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 50) Zinio is an example of which of the following? A) interactive book developer B) magazine aggregator C) e-reader platform D) vanity press Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 51) Which of the following is not an advantage that purely digital news sites have over print newspapers? A) They have a lower cost structure. B) They can create new workflows and business processes that are timelier and more efficient. C) They offer higher quality journalism. D) They can take advantage of newer technologies for producing the news. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 52) Which of the following native digital news sites was purchased by AOL? A) Vox B) Axios C) Buzzfeed D) Huffington Post Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

53) The ________ model is not one of the three business models employed by newspapers between 1995 and 2018. A) Print-centric B) Integrated Print/Web C) Digital First D) Convergence Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 54) Which of the following native digital news sites went public in 2021? A) Huffington Post B) Vox C) Politico D) Buzzfeed Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 55) Which of the following was sold to German publishing firm Axel Springer for more than $1 billion in 2021? A) Axios B) Huffington Post C) Vox D) Politico Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 56) According to Pew Research Center, more than ________ of U.S. adults surveyed get their news via a digital device at least some of the time? A) 25% B) 50% C) 80% D) 90% Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

57) In the wholesale model of e-book distribution, pricing power is with the publisher. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 58) Vox is an example of the Digital First business model. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 59) Discuss the difference between a wholesale and agency model of e-book distribution and pricing. Why didn't the wholesale model work for e-books, and what happened when publishers tried to implement an agency model? Answer: The wholesale model of distribution and pricing is the same model publishers used with hard cover books. In this model, the retail store pays a wholesale price for the book and then decides at what price to sell it to the consumer. The retailer sets the price, with an understanding with the publisher that the book will not be given away for free. In the past, the wholesale price was 50% of the retail price. With e-books, publishers discovered that some online retailers like Amazon and Apple began to sell books below cost to encourage customers to purchase their e-book reader devices, or to sell them other goods. The real value in e-books for Amazon and Apple is selling digital devices. Amazon not only sold millions of Kindles but also sold 90% of all e-book titles on the Web in 2011. Amazon had a de facto monopoly on e-books. In response, the top five publishers, along with Apple, introduced an agency model of distribution in which the distributor is an agent of the publisher, and can be directed to sell e-books at a price determined by the publisher, around $14.99 and higher for certain titles. In return for a 30% commission, Apple agreed to support this model, as did Google, neither of whom were comfortable watching as Amazon dominated one of the hottest areas of web content sales. Amazon's prices rose to this level, and its market share fell to 60%. However, as a result, the Justice Department sued the five publishers and Apple for price fixing in violation of antitrust laws. The case was settled, and Apple paid a fine of $450 million. Today, each publisher (and not an industry consortium) makes an agreement with Amazon about the price of their books (agency model). E-book prices from major publishers are variable, but generally sell for around $15. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.2: Understand the key factors affecting the online publishing industry.

60) Why have newspaper revenues significantly declined from what they were in 2000? Answer: The decline in newspaper revenues since 2000 has resulted from four factors: • The growth of the Web and mobile devices as an alternative medium for news and advertising. The movement of consumers online has drained billions of ad dollars (including classified ad revenue) from the printed newspaper. • The rise of alternative digital sources for news, commentary, feature stories, and articles. • The difficulty of traditional newspaper firms and their managers to develop suitable business and revenue models that could survive and even prosper on the Internet, and the mobile/social platform. • The rise of social media and search engines (primarily Google) which have directed users to news sites for individual articles rather than to the newspaper websites. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 61) What are the three different online business models that newspapers have employed since 1995? Answer: Newspapers have developed three distinct business models to adapt to the Internet and the mobile and social platform. The three models are Print-centric, Integrated Print/Web and the most current model, Digital First. In the Print-centric business model (1995-2000), newspapers created digital copies of their print editions and posted them online. Readers discovered stories as they did before, by reading the front page online, following links to stories, and clicking on topic areas or sections. Stories were promoted by a business department that sought to enlarge the print audience and to attract advertisers based on readership and online visitors. Digital advertising was very limited, in part because advertisers did not believe it was effective. Readers were not engaged with journalists except insofar as they read the stories and could identify with the subjects of stories. The business process of creating journalism did not change. There was little difference, if any, between the print and online versions. The technology platform for the digital edition was the desktop or laptop, and news was consumed at home and work. In the Integrated Print/Web business model (2000-2010), newspapers adopted multimedia elements such as video, added more interactive elements like crossword puzzles and contests, and provided more reader feedback opportunities, especially on opinion and editorial pages. There were opportunities to personalize the news using RSS feeds and push news to the reader. Nevertheless, news was discovered primarily by the reader visiting the website; promoting content online was limited, primarily to RSS feeds. Readers were somewhat more engaged. The technology platform remained the desktop or laptop platform. In the Digital First business model (2010 to present), digital news websites specifically focused on using new technology and platforms has spurred newspapers to radically transform their business – or go out of business. Today's platform is not based on personal computers using a browser, but on mobile devices and apps, with desktops and laptops now just one pillar of the delivery platform. In this new environment, the news does not stop at 5 PM, but goes on 24×7. Stories start with an initial short article that is updated through the day, followed by thousands of tweets, then millions of shares on multiple social networks and on Google. Often amateurs on scene know more about the news in the first hours of a story than any collection of journalists in their offices. Amateurs provide video feeds and commentary. 238 Copyright © 2024 Pearson Education, Inc.

The Digital First business model inverts previous models: the top priority is producing the most engaging, continually updated digital edition, and then producing a print product based on the news developed in the digital edition. In the case of digital news startups, there is no print edition, and the news is just a continuous stream of updates, blogs, tweets, and posts, rather than a fixed article. News articles are timestamped, indicating an update is on the way and the reader should return to follow the story. Instead of waiting for readers to discover the news, or search for the news on a search engine, the news is pushed to readers on any of a variety of venues where they happen to be – social networks, mobile news feeds, or Yahoo or Google News. Journalists remain professionals, but they promote their stories and personas on social networks. Their job is no longer simply reporting and writing, but promoting and engaging readers on a personal level through their own efforts. Superior reporting and writing are no longer the sole criterion for hiring and advancement. More emphasis is put on reporters' abilities to attract audiences on their own social media pages and Twitter feeds. The Digital First business model is not yet a total reality for traditional newspapers, although the largest print newspaper organizations, such as the Wall Street Journal, New York Times, Washington Post, and others, have begun the journey towards becoming Digital First news organizations. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.2: Understand the key factors affecting the online publishing industry. 62) Which streaming gaming channel was purchased by Amazon in 2015? A) Dailymotion B) YouTube Gaming C) Twitch D) Mixer Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 63) Which of the following statements about e-sports is not true? A) Many colleges now offer scholarships for players on their video game teams. B) YouTube Gaming accounts for over 80% of the online e-sports viewing in the United States. C) E-sports tournaments routinely draw an online audience equal to professional football games. D) The e-sport audience is predominantly composed of males between the ages of 21 and 34. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry.

64) ________ is the leading online television and movie distributor. A) Netflix B) Hulu C) iTunes D) Google Play Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 65) Which of the following statements is not true? A) iVOD revenues have grown faster than subscription streaming (SVOD) revenues. B) The average cable-cutter who signs up for several SVOD services is paying, on average, more than $30 a month for such services. C) Of all the content industries, thus far, the home entertainment and movie industry has been able to maintain its revenue stream and not be digitally destroyed by new technologies. D) The movie industry's control of the release window of a movie is a form of price discrimination. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 66) Which of the following statements about piracy in the movie and television industry is not true? A) Piracy still remains a threat to the movie and television industry. B) The most common method of piracy uses bit cyberlockers/file hosting sites. C) The monetary amount the movie industry loses as a result of piracy is unknown. D) There was a significant uptick in traffic to pirate websites during the Covid-19 pandemic. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry.

67) Which of the following statements about the home entertainment industry is not true? A) More than two-thirds of the U.S. population watch digital video on subscription-based OTT television services. B) Apple TV is the digital media device used by the most people in the United States. C) Both the television and movie industry share in home entertainment revenues. D) Neither the television nor film industries have built an industry-wide Internet delivery system. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 68) Which of the following statements about the music industry is not true? A) Music industry revenues in 2021 exceeded what they were in 1999. B) Digital revenues constituted 87% of all U.S. music revenues in 2021. C) More revenue was generated by the sales of digital downloads than physical units in 2021. D) Streaming music generated about 83% of all digital music sales in 2021. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 69) In 2021, which of the following was the producer of the largest percentage of revenues in the U.S. entertainment industry? A) radio B) television C) box office movies D) games Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 70) In 2021, which of the following forms of entertainment produced the smallest percentage of revenue? A) home entertainment B) box office movies C) games D) television Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 71) In 2022, which of the following comprised the largest segment of the online gaming audience? A) tablet gamers B) smartphone gamers C) PC gamers 241 Copyright © 2024 Pearson Education, Inc.

D) console gamers Answer: B Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 72) Which of the following statements about podcasting is not true? A) The podcasting industry is primarily supported by subscription revenue. B) Gen Z and Millennials currently account for almost 60% of all podcast listeners. C) Spotify is among the most popular platforms for the delivery of podcasts. D) Podcasting has transitioned from being primarily user-generated content produced by amateur producers to a professional talk content-distribution industry. Answer: A Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 73) All of the following are "live"/on-demand over-the-top (OTT) services except: A) Sling TV. B) AT&T TV Now. C) Netflix. D) YouTube TV. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 74) Which of the following is not a type of digital gamer? A) PC gamers B) local gamers C) social gamers D) MMO gamers Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry.

75) Which of the following platforms was used by the fewest gamers in 2022? A) consoles B) PCs C) smartphones D) tablets Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 76) Hollywood's practice of staggering the distribution of movies in different channels, such as box office and DVDs, is referred to as: A) dynamic pricing. B) content convergence. C) the release windows. D) digital rights management. Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 77) Which of the following statements is not true about over-the-top (OTT) services? A) To use OTT services, consumers must purchase a bundle of channels. B) OTT entertainment services are a threat to cable/satellite television delivery systems. C) OTT services include the ability to download content after purchase or rental, as well as subscription streaming and "live" TV services. D) OTT entertainment services enable binge watching. Answer: A Difficulty: Difficult AACSB: Information technology Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 78) Streaming has replaced downloading as the preferred consumer viewing platform for home entertainment content. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry.

79) Video game revenues are larger than revenues derived from any other form of online entertainment. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 80) What are e-sports and why are advertisers attracted to them? Answer: E-sports involve professional online gaming. Like other professional sports, e-sports are based on organized competitions of prominent video games and resemble major sporting events. The competition at the championship level takes place in auditoriums attended by thousands of fans and is watched by millions more on the Internet, on sites such as Twitch.tv, which is owned by Amazon. Worldwide, the e-sports audience was estimated to be more than 530 million in 2022, split relatively evenly between 270 million occasional viewers and 260 million enthusiasts. E-sports tournaments now routinely draw an online audience equal to professional football games. In 2021, about 74 million peak concurrent viewers watched the League of Legends World championship. The organization of the tournaments, and the prize money for the players, is provided by the games' publishers and advertisers. Advertisers are attracted to e-sports because the audience is predominantly composed of young males between the ages of 21 and 34, who are hard to reach using traditional media. Coca Cola, Nissan, Ford, and Google are among the largest sponsors of e-sports. College teams have sprung up around the country, and many colleges now offer scholarships for students who play on their video game teams. At current rates of growth, e-sports are in the process of transforming online gaming into a popular sport similar to fantasy football but with a much larger audience. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry.

81) Why has the compensation of artists and music labels for content been an issue for streaming music services? Answer: While music labels might receive 32 cents for every iTunes track they sell, they receive only .63 of a penny on a streamed version of the same song. This revenue is split with the artists, who receive .32 of a penny. Rolling Stone calculated that a very popular song selling 1 million streams would produce revenue of $3,166 for the artist and a similar amount for the music label. For artists, ad-supported streaming pays considerably less than subscription streaming. For this reason, many artists and groups refuse to allow free ad-supported streaming of their music. In 2014, Taylor Swift, one of the world's most popular singers, pulled her music from Spotify's free service because it paid such a low royalty rate. In 2015, she similarly pulled her album 1989 from Apple's newly announced Apple Music service because Apple was planning to not charge for the first three months of the service. Many other singers have withdrawn their performances from free streaming services, and there is a growing movement among musicians toward seeking higher compensation from streaming sites. Streaming services have responded by increasing their payouts to musicians for subscription-based streaming and in 2018, Congress passed the Music Modernization Act (MMA), aimed specifically at these issues. The MMA enables songwriters and artists to receive royalties on older songs recorded before 1972, create a legal process for music professionals to obtain unclaimed royalties due to them (previously these were held onto by the streaming services), and create a licensing database paid for by the streaming services but overseen by music publishers and songwriters that should streamline how songwriters are paid, all of which should help ensure that artists are paid more and have an easier time collecting royalties they are owed. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 10.3: Understand the key factors affecting the online entertainment industry. 82) Which of the following provides a platform that allows writers to monetize their content on a subscription basis via e-mail newsletters? A) Patreon B) YouTube C) Substack D) Roblox Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.4: Understand how creators are attempting to monetize user-generated content.

83) Which of the following is not a true statement about user-generated content? A) User-generated content is an integral part of the Web 2.0 movement and the development of social media. B) A large percentage of creators are able to earn more than $5,000 a year from a social network creator fund. C) Most creators use a variety of income-generating methods rather than relying on just one. D) Most of the major social networks have launched Creator Funds. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 10.4: Understand how creators are attempting to monetize user-generated content. 84) YouTube compensates creators on its platforms based on the advertising revenue generated by the ads YouTube runs alongside the content. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 10.4: Understand how creators are attempting to monetize user-generated content. 85) What are some of the ways that creators can earn money based on the content they create? Answer: There are a number of ways that creators can earn money based on the content they create. They can be supported by advertising, either directly from a brand for creating or sharing sponsored content or featuring a product placement, or from a share of the advertising earned by the platform on which their content appears. They can also sell digital content, either on a per-piece basis or on a subscription basis, as well as physical products. Non-fungible tokens (NFTs), which can be used to create unique digital assets such as collectibles, artwork, badges, and stickers, are a newer form of digital content that creators are beginning to use as rewards for their fans. Creators can also get "tips" from their fans (often characterized as "buying the creator a coffee"), money from a fan club or via a donation platform, or other types of fan engagement. Some creators offer online courses, either on their own platform or on a third-party site, or offer a livestream or other online event for a fee. Most creators use a variety of these income-generating methods rather than relying on just one. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 10.4: Understand how creators are attempting to monetize user-generated content. E-commerce 2023, 17e (Laudon/Traver) Chapter 11 Social Networks, Auctions, and Portals 1) One of the first online virtual communities, formed in 1985, was: A) The Well. B) Myspace. C) AOL. D) The Motley Fool. Answer: A 246 Copyright © 2024 Pearson Education, Inc.

Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 2) The technology used by early online communities was limited to mostly: A) instant messaging. B) FTP. C) e-mail. D) bulletin boards. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 3) Which of the following is a community of members who self-identify with a demographic or geographic category? A) practice network B) sponsored community C) affinity community D) interest-based social network Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 4) College Confidential is an example of a(n): A) interest-based social network. B) affinity community. C) sponsored community. D) practice network. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 5) Social network participation accounts for about what percent of the total time spent with digital media? A) 9.5% B) 14.5% C) 20.5% D) 24.5% Answer: B Difficulty: Moderate 247 Copyright © 2024 Pearson Education, Inc.

AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 6) Instagram is an example of a(n): A) interest-based social network. B) affinity community. C) general community. D) practice network. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 7) Which social network functionality allows users to view a list of updates from friends as well as advertisements and notifications in chronological order? A) message board B) timeline C) friends' network D) newsfeed Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 8) In 2022, around what percentage of Internet users uses social networks? A) 54% B) 64% C) 74% D) 84% Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 9) Which of the following lists the top four social networks in the order of the number of their U.S. users? A) TikTok, Facebook, Instagram, Twitter B) TikTok, Facebook, Instagram, LinkedIn C) Facebook, TikTok, Instagram, Snapchat D) Facebook, Instagram, TikTok, Snapchat Answer: C Difficulty: Difficult AACSB: Application of knowledge 248 Copyright © 2024 Pearson Education, Inc.

Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 10) Which of the following is a leading social network in Germany? A) Xing B) Tuenti C) Orkut D) Mixi Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 11) Which of the following has more than one billion worldwide users? A) Facebook and LinkedIn B) Facebook and TikTok C) TikTok and Instagram. D) Facebook and Instagram Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 12) Meta owns which of the following? A) Pinterest B) Snapchat C) WhatsApp D) Tumblr Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

13) A survey of Fortune 500 companies found that almost all used: A) Twitter. B) Facebook. C) LinkedIn. D) Instagram. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 14) On which of the following do users spent the least amount of time per month? A) Snapchat B) Twitter C) Instagram D) Pinterest Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 15) When did the first online communities form? A) the 1970s B) the 1980s C) the 1990s D) the 2000s Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 16) BlackPlanet is an example of a(n): A) practice network. B) interest-based social network C) affinity community. D) general community. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

17) Which of the following is an example of a practice network? A) Peanut B) Instagram C) DebatePolitics D) Doximity Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 18) Which of the following has the highest penetration of social network usage among Internet users? A) North America B) Latin America C) Europe D) Asia-Pacific Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 19) Which age group has the fastest growing rate of Facebook usage? A) 12-34 B) 35-45 C) 46-65 D) adults over 65 Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 20) Which of the following social networks provides an open-source alternative to Twitter? A) MeWe B) Mastodon C) BeReal D) Vero Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

21) Which of the following owns LinkedIn? A) Meta B) Google C) Microsoft D) Apple Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 22) Instagram is owned by which of the following? A) Google B) Apple C) Meta D) Microsoft Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 23) Which of the following statements about Instagram is not true? A) In 2021, Instagram and Facebook both generated about the same amount of U.S. ad revenue. B) Instagram is a social network that focuses on video and photo sharing. C) Instagram is growing more quickly than Facebook. D) Instagram users spend more time on Instagram than Facebook users spend on Facebook. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 24) Howard Rheingold, one of The Well's early participants, coined the term ________ to refer to "cultural aggregations that emerge when enough people bump into each other often enough in cyberspace." A) social networks B) virtual communities C) community portals D) social forums Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

25) A(n) ________ offers members focused discussion groups, help, information, and knowledge related to an area of shared interest. A) practice network B) general community C) affinity community D) interest-based social network Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 26) The amount of time visitors spend on a site is a measure of: A) reach. B) loyalty. C) conversation. D) engagement. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 27) What percent of the world's total population users social networks? A) 25% B) 45% C) 55% D) 60% Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 28) TikTok skews much younger than the other major social networks. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

29) Spending on social network advertising in the United States is expected to generate more than 50% of total digital ad spending. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 30) Algorithms are one of the most important technologies used by social networks. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 31) Briefly describe the evolution of social networks from their earliest appearance. Answer: The earliest social networks, in the mid-1980s and 1990s were community bulletin boards, or discussion groups, like The Well. In the early 2000s, technology changed, bringing in blogging and photo sharing features. As the Internet user population expanded, more and more socially oriented sites appeared, including Facebook, allowing users to share content directly with each other. More recently, in the late 2000s and early 2010s, as the Internet became available to browse (and post to) via mobile devices, more and more photo and video sharing social networks have emerged, such as Pinterest and Instagram. A newer crop of social networks launched since 2008 (i.e., Snapchat and WhatsApp) focus on messaging. TikTok, the newest significant social network, focuses on short-form video sharing. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 32) Name four shared characteristics of social networks. Answer: Social networks involve (1) a group of people, (2) shared social interactions, (3) common ties among members, and (4) people who share an area for some period of time. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

33) What is an algorithm and how are they relevant to social networks? Answer: Algorithms are one of the most important technologies used by social networks. Algorithms are sets of step-by-step instructions, similar to a recipe, for producing a desired output from required inputs. Computer algorithms are computer programs that carry out step-by-step instructions to produce desired outputs. The problem that social networks such as Facebook need to solve is how to select content (actions of their friends and news stories) for display on users' pages that they will find interesting, and likely click on. Also, social networks need to prevent information that is irrelevant from appearing on user pages. Social networks typically use algorithms for this purpose. For example, in 2010 Facebook patented an algorithm to produce what it calls relationship-based content personalized for members of a social network. . Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 34) What business models do social networks primarily use? Answer: The most popular general social networks have adopted an advertising model, and make money from ads displayed to users. There are also for profit and non-profit networks that stay afloat from user donations, member dues, premium services, or through sponsorship financing. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models. 35) Discuss the impact social networks have had on how businesses operate, communicate, and serve their customers. Answer: Social networks have had an important impact on how businesses operate, communicate, and serve their customers. A recent survey of Fortune 500 firms found that these firms are increasing their use of social media. Almost all Fortune 500 firms (98%) used LinkedIn, 91% used Twitter, 89% used Facebook, and 63% used Instagram. The most visible business firm use of social networks is as a marketing and branding tool. A less visible marketing use of networks is as a powerful listening tool which has strengthened the role of customers and customer feedback systems. Social networks are where corporate brands and reputations are formed, and firms today take very seriously the topic of "online reputation," as evidenced by social network posts, commentary, chat sessions, and Likes. In this sense, social network sites have become an extension of corporate customer relationship management systems and extend existing market research programs. Beyond branding, social networks are being used as advertising platforms to contact targeted audiences. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.1: Describe the different types of social networks and online communities and their business models.

36) Which of the following statements about auctions is not true? A) Most of the listings on eBay today use auction pricing. B) The popularity of online auctions has significantly declined. C) Online auctions were among the most successful early business models in retail and B2B e-commerce. D) The marketplace for online auctions is highly concentrated. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 37) All of the following are benefits of auctions except: A) more efficient price discovery. B) lower transaction costs. C) decreased price transparency. D) increased market efficiency. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 38) ________ is the market leader in C2C auctions. A) Amazon B) eBay C) Walmart D) eBid Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 39) Which of the following is not a risk or cost of Internet auctions? A) delayed consumption costs B) equipment costs C) price transparency D) trust risks Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

40) The fact that participating in an Internet auction means that you will need to purchase a computer, learn to use it, and pay for Internet access, is an example of ________ costs. A) equipment B) fulfillment C) delayed consumption D) monitoring Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 41) All of the following are solutions to the problem of high monitoring costs except: A) seller rating systems. B) watch lists. C) proxy bidding. D) fixed pricing. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 42) Which of the following types of auctions "shields the brand" of the seller? A) English auction B) reverse auction C) bidding fee auction D) penny auction Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 43) Which of the following allows the consumer to enter a maximum price and the auction software automatically places incremental bids, up to that maximum price, as their original bid is surpassed? A) watch lists B) proxy bidding C) sealed bidding D) price matching Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 257 Copyright © 2024 Pearson Education, Inc.

44) ________ occurs when sellers agree informally or formally to set floor prices below which they will not sell on auction items. A) Discriminatory pricing B) Price matching C) Bid rigging D) Distress pricing Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 45) Quibids is an example of which of the following types of auction company? A) English auction B) reverse auction C) penny auction D) "Name Your Own Price" auction Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 46) All of the following types of auctions involve single units except: A) an English auction. B) a bidding fee auction. C) a reverse auction. D) a penny auction. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 47) A(n) ________, in which the highest bidder wins, is the most common form of auction. A) bidding fee auction B) penny auction C) English auction D) reverse auction Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

48) Which of the following types of auctions was pioneered by Priceline in the B2C area? A) English auction B) bidding fee auction C) penny auction D) reverse auction Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 49) Which of the following is not one of the top factors a business should consider when planning an online auction? A) type of product B) type of auction C) location of auction D) bid increments Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 50) The profit a seller makes at auction is a function of all of the following except: A) initial pricing. B) auction length. C) the number of units for auction. D) watch lists. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 51) ________ is the tendency to gravitate toward, and bid for, auction listings with one or more existing bids. A) Group buying B) Winner's regret C) Herd behavior D) Bid rigging Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

52) Which of the following involves the feeling after winning an auction that you paid too much for an item? A) herd behavior B) winner's regret C) seller's lament D) loser's lament Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 53) Which of the following involves e-mailing another seller's bidders and offering the same product for less? A) transaction interception B) bid siphoning C) shill bidding D) persistent bidding Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 54) Threatening negative feedback in return for a benefit is an example of: A) feedback extortion. B) offensive shill feedback. C) defensive shill feedback. D) sending spam. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 55) One partial solution to high monitoring costs is ________ pricing. A) fixed B) dynamic C) allocated D) distress Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

56) The term ________ refer(s) to the advantages conferred as an auction site becomes larger in terms of visitors and products for sale. A) siphoning B) herd behavior C) network effects D) channel expansion Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 57) A ________ permits the consumer to monitor specific auctions of interest, requiring the consumer to pay close attention only in the last few minutes of bidding. A) bidding fee auction B) channel manager C) watch list D) rating system Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 58) The time spent watching and reviewing auction bids is a part of ________ costs. A) pricing B) monitoring C) delayed consumption D) fulfillment Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 59) E-mailing buyers to warn them away from a seller is a type of auction fraud known as: A) transaction interference. B) bid siphoning. C) bid rigging. D) shill bidding. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

60) ________ refers to the feeling of having been too cheap in bidding and failing to win an auction. A) Winner's lament B) Winner's regret C) Loser's lament D) Loser's regret Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 61) ________ refers to the use of secondary user IDs or bidders who have no actual intention to buy to artificially raise the price of an item. A) Bid manipulation B) Shill feedback C) Shill bidding D) Bid rigging Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 62) In C2C auctions, the auction company is an intermediary market maker. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 63) Penny auctions don't require money to bid. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 64) A reverse auction utilizes fixed pricing. Answer: TRUE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

65) Auctions constitute a significant part of B2B e-commerce. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 66) Keeping bid increments low decreases the number of bidders and lowers the frequency of their bids. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 67) Closed bidding offers the advantage of herd effects. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 68) Auction prices are often higher than prices in fixed priced markets. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 69) Consumers in auctions are driven solely by value maximization. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

70) Briefly describe the primary types of auctions found on the Internet and how they function. Answer: The primary types of auctions found on the Internet are English, reverse, and penny (bidding fee) auctions. In an English auction, a single item is up for sale from a single seller. There is a time limit when the auction ends, a reserve price below which the seller will not sell (usually secret), and a minimum incremental bid set. Multiple buyers bid against one another until the auction time limit is reached. The highest bidder wins the item, as long as the high bid has met or exceeded the reserve price set by the seller. English auctions are considered to be seller-biased because multiple buyers compete against one another–usually anonymously. In a reverse auction (also known as a "Name Your Own Price" auction when pioneered by Priceline), buyers specify the price they are willing to pay for an item and multiple providers bid for their business. Prices do not descend and are fixed. The initial offer is a commitment to purchase at that price. Today, reverse auctions are primarily found in the B2B arena. In a penny auction (also known as bidding fee auction), you typically must pay the penny auction company for bids ahead of time, typically 50 cents to $1 dollar, usually in packs costing $25-$50. Once you have purchased the bids, you can use them to bid on items listed by the penny auction (unlike traditional auctions, items are owned by the auction company, not third parties). Items typically start at or near $0 and each bid raises the price by a fixed amount, usually just a penny. Auctions are timed, and when the time runs out, the last and highest bidder wins the item. Although the price of the item itself may not be that high, the successful bidder will typically have spent much more than that price. Unlike a traditional auction, it costs money to bid and that money is gone even if the bidder does not win the auction. The bidder's cumulative cost of bidding must be added to the final price of a successful bid to determine the true cost of the item. Bidders may find that they spend far more than they intended. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

71) What are the benefits of online auctions for sellers and buyers? Answer: The general benefits of auctions to sellers and buyers are: liquidity, price discovery, price transparency, market efficiency, lowered transaction costs, consumer aggregation, and network effects. Liquidity: Sellers can find willing buyers, and buyers can find willing sellers. Sellers and buyers can be located anywhere around the globe. Just as important, buyers and sellers can find a global market for rare items that would not have existed before the Internet. Price discovery: Buyers and sellers can quickly and efficiently develop prices for items that are difficult to assess, when the price depends on demand and supply, and when the product is rare. Price transparency: Public online auctions allow everyone to see the asking and bidding prices for items. Market efficiency: Auctions can, and often do, lead to reduced prices, and hence reduced profits for merchants, leading to an increase in consumer welfare–one measure of market efficiency. Lower transaction costs: Online auctions can lower the cost of selling and purchasing products, benefiting both merchants and consumers. Like other Internet markets, such as retail markets, online auctions have very low (but not zero) transaction costs. Consumer aggregation: Sellers benefit from large online auctions' ability to aggregate a large number of consumers who are motivated to purchase something in one marketspace. Network effects: The larger an online auction becomes in terms of visitors and products for sale, the more valuable it becomes as a marketplace for everyone by providing liquidity and several other benefits listed previously, such as lower transaction costs, higher efficiency, and better price transparency. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud.

72) What are the costs and risks for buyers at an auction, and how have auction sites sought to reduce these risks? Answer: The costs for buyers when they participate in an auction are delayed consumption, monitoring costs, equipment costs, trust risks, and fulfillment costs. Delayed consumption occurs because auctions can go on for days and the product must then be shipped to the buyer. Buyers will typically want to pay less for an item for which they cannot receive immediate gratification. Buyers must also spend time monitoring the bidding, returning to the auction frequently to see if they need to raise their bid. They must also purchase, or have already purchased, computer systems and Internet service, and learned how to operate these systems. Since buyers must pay for packing, shipping, and insurance, they will factor these fulfillment costs into their bid price. Consumers also face an increased risk of experiencing a loss because online auctions are a major source of Internet fraud. Auction companies have sought to reduce these trust risks through various methods including rating systems, watch lists, and proxy bidding. Rating systems are designed so that previous customers can evaluate sellers based upon their experience with them. These evaluations are posted for other buyers to see. Watch lists allow buyers to monitor specific auctions as they proceed over several days and only pay close attention in the last few minutes of bidding. In proxy bidding systems, buyers can enter the maximum price they are willing to pay, and the auction software will automatically place incremental bids as their original bid is surpassed. In addition, one partial solution to high monitoring costs is, ironically, fixed pricing. At eBay, consumers can reduce the cost of monitoring and waiting for auctions to end by simply clicking on the "Buy It Now!" button and paying a premium price. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.2: Describe the major types of auctions, their benefits and costs, how they operate, when to use them, and the potential for auction abuse and fraud. 73) Which of the following purchased Yahoo and AOL as part of a strategy aimed entering the digital content and advertising industry? A) AT&T B) Microsoft C) AOL D) Verizon Media Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models.

74) Which of the following is not a true statement about portals? A) Portals today seek to be a sticky destination. B) Yahoo has become one of the largest sources of online news. C) Current consumer behavior trends advantage special-purpose, vertical market portals. D) The limited time budget of consumers works to the advantage of vertical market portals. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 75) Which of the following is not one of the defining functions of a portal? A) commerce B) content C) auctions D) navigation of the Web Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 76) Which of the following statements best describes the potential impact of network effects with respect to portals? A) Specialized vertical market portals attract only a small percentage of the audience, while a few large megaportals garner most of the market. B) The value of the portal to advertisers and consumers increases geometrically as reach increases. C) The greater the amount of content provided by a portal, the greater its value to the community. D) The greater number of portals available, the greater the potential audience for each. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 77) Which of the following did not begin as a search engine? A) Yahoo B) Facebook C) AOL D) MSN Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 78) WebMD.com is an example of a: A) general purpose portal. B) vertical market portal based on affinity group. C) vertical market portal based on focused content. D) focused content portal. 267 Copyright © 2024 Pearson Education, Inc.

Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 79) Which of the following is not one of the typical portal revenue sources? A) commissions on sales B) subscription fees C) tenancy deals D) referral fees Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 80) The original portals in the early days of e-commerce were search engines. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 81) The value of portals to advertisers and content owners is primarily a function of the size of the audience the portal reaches, and the length of time visitors stay on the site. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 82) Vertical content portals and affinity group portals tend to be more well-known brands than general-purpose portals. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models.

83) Portals are not immune to network effects. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 84) Identify and describe the main types of portals. Answer: There are two primary types of portals: general purpose and vertical market. General purpose portals attempt to attract a very large general audience and then retain the audience on-site by providing in-depth vertical content channels. Vertical market portals (sometimes also referred to as destination sites or vortals) attempt to attract highly focused, loyal audiences with a deep interest either in community or specialized content – from sports to the weather. In addition to their focused content, vertical market portals have recently begun adding many of the features found in general purpose portals. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.3: Describe the major types of Internet portals and their business models. 85) What business models do portals use? Answer: Portals receive income from several different sources. The revenue base of portals is changing and dynamic, with some of the largest sources of revenue declining. Typical revenue sources include general advertising, tenancy deals, commissions on sales, subscription fees, and fees from applications and games. The business strategies of both general-purpose and vertical portals have changed greatly because of the rapid growth in search engine advertising and intelligent ad placement networks such as Google's AdSense. General portals such as AOL and Yahoo did not have well-developed search engines, and hence did not grow as fast as Google, which developed a powerful search engine. On the other hand, general portals have content, which Google did not originally have, although it has since added content by purchasing YouTube and adding Google sites devoted to news, financial information, images, and maps. General portals are attempting to provide more premium content focused on subcommunities of their portal audience. Advertisers on portals are especially interested in focused, revenue-producing premium content available on portals because it attracts a more committed audience. There is a direct relationship between the revenue derived from a customer and the focus of the customer segment. The survival strategy for general purpose portals in the future is therefore to develop deep, rich, vertical content to reach customers at the site. The strategy for smaller vertical market portals is to put together a collection of vertical portals to form a vertical portal network. The strategy for search engines such as Google is to obtain more content to attract users for a long time and expose them to more ads. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 11.3: Describe the major types of Internet portals and their business models. E-commerce 2023, 17e (Laudon/Traver) Chapter 12 B2B E-commerce: Supply Chain Management and Collaborative Commerce 1) Analysts predict that B2B e-commerce in the United States will grow to approximately ________ by 2024. A) $8.5 billion B) $85 billion 269 Copyright © 2024 Pearson Education, Inc.

C) $850 billion D) $8.5 trillion Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 2) In 2021, B2B e-commerce accounted for approximately ________ of all B2B commerce. A) 23.5% B) 48% C) 52% D) 76.5% Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 3) Which of the following was the first step in the development of B2B e-commerce? A) Electronic Data Interchange (EDI) B) automated order entry systems C) computerized inventory databases D) digital invoices Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.

4) Which of the following refers to the links that connect business firms with one another to coordinate production? A) supply chain B) B2B e-commerce C) vertical market D) horizontal market Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 5) Automated order entry systems: A) only show goods from a single seller. B) increased the costs of inventory replenishment. C) are typically owned by the purchasing firm. D) no longer play an important role in B2B commerce. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 6) Which of the following statements about EDI systems is true? A) They typically serve vertical markets. B) They are seller-side solutions. C) EDI systems first emerged in the 1960s. D) EDI no longer plays an important role in B2B e-commerce. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 7) B2B e-commerce websites: A) are a predecessor of industry consortia. B) tend to serve horizontal markets. C) are buyer-side solutions. D) are considered a type of EDI system. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.

8) Which of the following is the natural descendant of automated entry systems? A) industry consortia B) EDI system C) B2B e-commerce websites D) private B2B networks Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 9) In 2021, which of the following accounted for the smallest amount of B2B commerce? A) EDI B) private B2B networks C) B2B e-commerce marketplaces D) traditional B2B Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 10) All of the following are potential benefits of B2B e-commerce except: A) lower administrative costs. B) lower search costs. C) lower price transparency. D) lower transaction costs. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 11) EDI began as a(n) ________ system. A) document automation B) document exchange C) invoice generation D) MRP Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.

12) All of the following are potential benefits of B2B e-commerce except: A) increased production flexibility. B) increased product cycle time. C) increased opportunities to collaborate with suppliers and distributors. D) increased visibility and real-time information sharing among all participants in the supply chain network. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 13) All of the following have led to the development of outsourcing of manufacturing around the world except: A) technology. B) globalization of trade. C) environmental concerns. D) high levels of wage disparity between the developed and undeveloped worlds. Answer: C Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 14) Supply chain ________ refers to differentiating a firm's products or prices on the basis of superior supply chain management. A) management B) simplification C) competition D) collaboration Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 15) A(n) ________ market is one that provides expertise and products for a specific industry (i.e., automobiles). A) vertical B) horizontal C) indirect D) buyer-biased Answer: A Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 273 Copyright © 2024 Pearson Education, Inc.

16) The essential characteristic of ________ is that they bring hundreds to thousands of suppliers into a single Internet-based environment to conduct trade. A) industry consortia B) exchanges C) B2B e-commerce marketplaces D) horizontal markets Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 17) B2B e-commerce can create greater price transparency. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 18) Few large firms today have Electronic Data Interchange (EDI) systems. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.

19) Define and discuss the terms B2B commerce, B2B e-commerce, and supply chains in the context of the history and significance of B2B e-commerce. Answer: Before the Internet, business-to-business transactions were referred to simply as trade or the procurement process. The term B2B commerce refers to all types of inter-firm trade to exchange value across organizational boundaries. B2B commerce includes the following business processes: customer relationship management, demand management, order fulfillment, manufacturing management, procurement, product development, returns, logistics/transportation, and inventory management. The term B2B e-commerce (or B2B digital commerce) refers to that portion of B2B commerce that is enabled by the Internet (including mobile apps) to assist firms in buying and selling a variety of goods to each other. The links that connect business firms in the production of goods and services are referred to as the supply chain. Supply chains are a complex system of organizations, people, business processes, technology, and information, all of which need to work together to produce products efficiently. Today's supply chains are often global. The process of conducting trade among businesses consumes many business resources. Across the economy this amounts to trillions of dollars spent annually on procurement processes. If a significant portion of this inter-firm trade could be automated and parts of the procurement process assisted by the Internet, millions or even trillions of dollars could be freed up for other uses resulting in increased productivity and increased national economic wealth. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges.

20) Identify and describe the major stages in the development of B2B commerce. Answer: B2B commerce has evolved over a 45-year period through several technology-driven stages. The major stages in this evolution were the development of automated order entry systems, electronic data interchange (EDI), digital storefronts, private B2B networks, and B2B e-commerce marketplaces. Automated order entry systems began in the mid-1970s with the use of telephone modems to send digital orders to health care products companies. Modems were eventually replaced by personal computers using private networks in the late 1980s, and by Internet workstations accessing electronic online catalogs in the late 1990s. By the late 1970s, a new form of computer-to-computer communication called electronic data interchange (EDI) emerged. EDI is a communications standard for sharing business documents such as invoices, purchase orders, shipping bills, product stocking numbers (SKUs), and settlement information among a small number of firms. Virtually all large firms have EDI systems, and most industry groups have industry standards for defining documents in that industry. B2B e-commerce websites emerged in the mid-1990s along with the commercialization of the Internet. B2B e-commerce websites are online catalogs of products made available to the public marketplace by a single supplier. B2B e-commerce marketplaces emerged in the late 1990s as a natural extension and scaling up of B2B e-commerce websites. These marketplaces bring hundreds to thousands of suppliers and potentially thousands of purchasing firms into a single Internet-based environment to conduct trade with business customers. Private B2B networks also emerged in the late 1990s as natural extensions of EDI systems and the existing close relationships that developed between large industrial firms and their trusted suppliers. Private B2B networks are Internet-based communication environments that extend far beyond procurement to encompass supply chain efficiency enhancements and truly collaborative commerce. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.1: Discuss the evolution and growth of B2B e-commerce, as well as its potential benefits and challenges. 21) What is the first step in the procurement process? A) negotiate price B) qualify the seller and its products C) issue a purchase order D) search for suppliers Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce.

22) The last step in the procurement process is: A) sending a remittance payment. B) sending the invoice. C) shipping the goods. D) delivering the goods. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 23) Office supplies are an example of: A) direct goods. B) indirect goods. C) MRO goods. D) distributed goods. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 24) The majority of inter-firm trade involves: A) spot purchasing of direct goods. B) contract purchasing of indirect goods. C) contract purchasing of direct goods. D) spot purchasing of indirect goods. Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 25) All of the following are examples of direct goods in the auto industry except: A) sheet steel. B) shatter-resistant glass. C) rubber molding. D) desktop computers. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce.

26) An example of an indirect good in the fast-food industry is: A) mustard. B) paper napkins. C) beef. D) sugar. Answer: B Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 27) ________ purchasing involves the purchase of goods based on immediate needs in larger marketplaces that involve many suppliers. A) Spot B) Indirect C) Vertical D) Bulk Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 28) MRO goods are also known as direct goods. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 29) Purchasing managers are key players in the procurement process. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce.

30) What does the term supply chain visibility refer to and what benefits does it bring? Answer: The term supply chain visibility refers to the ability of a firm to monitor the output and pricing of its first and second tier suppliers, track and manage supplier orders, and manage transportation and logistics suppliers who are moving the products. A supply chain is visible when you know exactly what you have ordered from your suppliers and what their production schedule is, and when you can track the goods through shipping and trucking firms to your in-bound warehouse. With this knowledge, the firm's internal enterprise systems can produce production schedules and develop financial forecasts. Generally, the more firms invest in digitally enabled supply chains, the greater the visibility into the process that managers have. Supply chain visibility has become even more of a priority in the wake of the Covid-19 pandemic, as many firms continue to suffer severe supply chain disruptions, in part due to lack of real-time data about the functioning of their supply chains. The pandemic has highlighted the fact that supply chain practices such as just-in-time and lean manufacturing present heightened risk unless coupled with full supply chain visibility into demand, supply, and logistics. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 31) Define the procurement process. What are the seven basic steps in the procurement process? Answer: The procurement process refers to the way business firms purchase the goods they need to produce the goods they will ultimately sell to consumers. Firms purchase goods from a set of suppliers that in turn purchase their inputs from another set of suppliers. These firms are linked in a series of connected transactions. The supply chain refers to this series of transactions, which links sets of firms that do business with each other. It includes not only the firms themselves but also the relationships between them and the processes that connect them. There are seven steps in the procurement process: searching for suppliers for specific products; qualifying the sellers and the products they sell; negotiating prices; credit terms, escrow requirements, quality, and scheduling delivery; issuing purchase orders; sending invoices; goods are shipped; and the buyer sends a payment. Each step is composed of separate substeps that must be recorded in the information systems of the buyer, seller, and shipper. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce.

32) All of the following are major technology trends in B2B e-commerce in 2022-2023, except: A) a movement of B2B systems to cloud computing providers as a means of slowing rising technology costs. B) a growing emphasis on the use of business analytics software (business intelligence) to understand very large data sets. C) a growing use of the mobile platform for B2B systems. D) a decrease in the use of social network platforms. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 33) A circular economy is based on all of the following principles except the: A) elimination of waste and pollution in the production process. B) use of product-based supply chains. C) recycling of products and materials. D) regeneration of nature. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 34) Which of the following is a method of inventory cost management that seeks to eliminate excess inventory? A) lean production B) sustainable production C) just-in-time production D) supply chain simplification Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 35) Which of the following statements about cloud-based B2B systems is not true? A) Much of the expense of the system is shifted from the B2B network provider to the firm. B) B2B network providers charge customers on a demand basis. C) Network effects apply, enabling the spreading of costs. D) Cloud-based B2B data networks can be implemented in short periods of time. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 280 Copyright © 2024 Pearson Education, Inc.

36) ________ is a method for ensuring that suppliers precisely deliver ordered parts at a specific time and to a particular location. A) Having an adaptive supply chain B) Tight coupling C) Supply-chain management D) Materials requirement planning Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 37) Which of the following is a transaction database that operates on a distributed P2P network that connects all participant members in a single database and is highly secure, reliable, resilient, and inexpensive? A) SCM system B) blockchain C) EDI D) cloud-based B2B system Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 38) A(n) ________ system continuously links the activities of buying, making, and moving products from suppliers to purchasing firms, as well as integrating order entry systems. A) EDI B) ERP C) CPFR D) SCM Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 39) Collaborative commerce systems: A) focus on structuring intra-firm communications. B) bring customers into the product development phase. C) provide open, competitive marketplaces. D) foster sharing sensitive internal information with suppliers and purchasers. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 281 Copyright © 2024 Pearson Education, Inc.

40) Which of the following is not a characteristic of the use of social networks in B2B e-commerce? A) It is typically unstructured. B) It helps develop a more personal relationship between participants in the supply chain. C) It enables participants to make decisions based on current conditions. D) They are always private. Answer: D Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 41) Walmart is using which of the following technologies in its Food Traceability Initiative? A) EDI B) blockchain C) cloud-based B2B system D) collaborative commerce system Answer: B Difficulty: Moderate AACSB: Information technology Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 42) Which of the following is an extension of just-in-time production? A) accountable supply chains B) sustainable supply chains C) lean production D) BYOD policies Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 43) A(n) ________ supply chain is one in which the labor conditions in low-wage, less producer countries are visible and morally acceptable to ultimate consumers in more developed industrial societies. A) sustainable B) ethical C) lean D) accountable Answer: D Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 282 Copyright © 2024 Pearson Education, Inc.

44) ________ production is a set of production methods that focuses on the elimination of waste throughout the customer value chain. A) Green B) Sustainable C) Lean D) Just-in-time Answer: C Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 45) ________ is defined as the use of digital technologies to permit organizations to work together to design, develop, build, and manage products through their life cycles. A) SCM B) Social e-commerce C) EDI D) Collaborative commerce Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 46) The term BYOD refers to employees: A) working from home. B) being allowed or encouraged to use their own mobile devices and laptops. C) using mobile devices for work. D) bringing work devices to the home. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.

47) Which of the following statements about B2B marketing is not true? A) The majority of B2B ad spending is aimed at desktops. B) Spending on B2B digital marketing and advertising accounts for about 30% of the total amount spent on digital marketing and advertising. C) LinkedIn is the most common social network used for B2B marketing. D) The disparity between the amount spent on B2B marketing compared to B2C e-commerce reflects the different nature of much of B2B e-commerce when compared to B2C e-commerce. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 48) Highly centralized supply chains produce higher short-term costs and lower long-term risk protection. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 49) A digital twin allows companies to "stress-test" their supply chains. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 50) The primary goal of tight coupling is to reduce excess inventory to a bare minimum. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 51) What is the difference between an accountable supply chain and a sustainable supply chain? Answer: Accountable supply chains are those where the labor conditions in low-wage, less developed producer countries are visible and morally acceptable to the ultimate consumers in more developed, industrial societies. A sustainable supply chain takes a wider focus, as it takes both social and ecological interests into account throughout the firm's decision making, including issues such as carbon footprint and impact on the environment and community. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.

52) Define and explain supply chain management systems, supply chain simplification, \ just-in-time production, tight coupling, and the relationship between these concepts. Answer: Supply chain management systems coordinate and link the activities of suppliers, shippers, and order entry systems to automate the order entry process from start to finish including the purchase, production, and moving of a product from a supplier to a purchasing firm. Contemporary supply chain management systems increase transparency and responsiveness because all the activities in the supply chain are able to interact with one another in near real-time, enabling companies to establish interconnected networks of what had been discrete, siloed supply chain processes and to manage their supply chains more flexibly. Supply chain simplification refers to the reduction of the size of a firm's supply chain. Firms today generally prefer to work closely with a strategic group of suppliers to reduce both product costs and administrative costs. Instead of open bidding for orders, large manufacturers have chosen to work with strategic partner supply firms under long-term contracts that guarantee the supplier business and establish quality, cost, and timing goals. These strategic partnership programs are essential for just-in-time production models. Just-in-time production is a method of inventory cost management that seeks to reduce excess inventory to a bare minimum. Supply chain simplification often involves joint product development and design, integration of computer systems, and tight coupling of the production processes of two or more companies. Tight coupling is a method for ensuring that suppliers precisely deliver the ordered parts at a specific time and to a particular location, ensuring the production process is not interrupted for lack of parts. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce. 53) How are social networks being used in B2B e-commerce? Answer: In B2B e-commerce, social networks are beginning to be common tools for procurement offers, managers of supply chains, logistics managers and others engaged in B2B e-commerce. Social networks can provide personal connections among customers, suppliers, and logistics partners that are needed to keep the supply chain functioning, and to make decisions based on current conditions. Participants in the supply chain use social networks for purchasing, scheduling, exception handling, and making decisions with their B2B customers and suppliers. In many cases, supply chain social networks are private and owned by the largest firm in the supply chain network. In other cases, firms develop Facebook groups to organize conversations among supply chain network members. Public social network sites like Facebook and Twitter can be excellent for coordinating the flow of information among business partners through the supply chain. Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication Learning Objective: 12.3: Identify major trends in supply chain management and collaborative commerce.

54) An ________ is an independently owned, online marketplace that connects hundreds to potentially thousands of suppliers and buyers in a dynamic, real-time environment. A) exchange B) e-distributor C) e-procurement company D) industry consortium Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 55) An ________ primarily serves businesses that primarily buy indirect goods on a spot purchasing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 56) The liquidity of a market is measured by all of the following except: A) price transparency. B) number of buyers and sellers in market. C) volume of transactions. D) size of transactions. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.2: Understand how procurement and supply chains relate to B2B e-commerce. 57) Which of the following is an example of an e-distributor? A) Grainger B) Go2Paper C) The Seam D) Ariba Network Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces.

58) Which of the following primarily serve horizontal markets? A) e-distributors and exchanges B) e-distributors and e-procurement companies C) e-procurement companies and industry consortia D) exchanges and industry consortia Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 59) Which of the following primarily deal with indirect goods? A) e-distributors and industry consortia B) e-distributors and e-procurement companies C) exchanges and industry consortia D) exchanges and e-procurement companies Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 60) Which of the following primarily deal with direct goods? A) e-distributors and independent exchanges B) exchanges and e-procurement companies C) exchanges and industry consortia D) e-procurement companies and industry consortia Answer: C Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 61) Which of the following primarily involve long-term sourcing? A) e-distributors and exchanges B) e-distributors and industry consortia C) e-procurement companies and exchanges D) e-procurement companies and industry consortia Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces.

62) An ________ provides an online catalog that represents the products of thousands of direct manufacturers. A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 63) E-distributors are sometimes referred to as: A) one-to-one markets. B) one-to-many markets. C) many-to-few markets. D) many-to-many markets. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 64) E-distributors: A) make money by charging a mark-up on products they distribute. B) usually operate "private" markets. C) operate in vertical markets. D) focus on selling direct products. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 65) An ________ primarily serves businesses that primarily buy indirect goods on a long-term sourcing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces.

66) ________ is an example of an e-procurement company. A) McMaster-Carr B) Ariba C) Amazon Business D) SupplyOn Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 67) An ________ serves businesses that primarily buy direct goods on a long-term sourcing basis. A) e-distributor B) e-procurement company C) exchange D) industry consortium Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 68) The Seam is an example of an: A) exchange. B) industry consortium. C) e-procurement company. D) e-distributor. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 69) Newegg Business is an example of a(n): A) e-distributor. B) exchange. C) private B2B network. D) e-procurement company. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces.

70) Industry consortia sprang up in part as a reaction to the development of independently owned exchanges. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 71) E-procurement marketplaces are sometimes referred to as many-to-one markets. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 72) The number of firms that can be defined as industry consortia has significantly increased since the early 2000s. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 73) Exchanges are not directly tied to ERP systems used by large firms. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 74) What is an e-procurement company and what services do they provide? Answer: An e-procurement company is an independently owned intermediary that helps businesses automate their procurement processes and in some instances, provides a marketplace that connects the supplier to buyers who pay a fee to join the market. Their services include providing a marketplace for long-term contractual purchasing as well as some spot-sourcing of indirect goods (MRO). They provide value chain management (VCM) services to both buyers and sellers. VCM services include automation of a firm's entire procurement process on the buyer side (e.g., purchase orders, sourcing, requisitions), and automation of the selling business processes on the seller side (e.g., catalog creation, order management, invoicing). Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces.

75) Describe at least five characteristics of B2B e-commerce marketplaces. Answer: Characteristics of B2B e-commerce marketplaces include (1) bias–whether the marketplace advantages sellers, buyers, or each group equally (neutral); (2) ownership–who owns the marketplace, a specific firm, group of firms, or an industry group; (3) pricing mechanism–how are prices determined for products sold: fixed prices, bidding, RFPs; (4) Scope/focus–does the marketplace serve horizontal or vertical markets; (5) value creation–what benefits are offered to customers or suppliers; and (6) access to market–is the marketplace open to everyone or limited to invitees only. Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication Learning Objective: 12.4: Understand the different characteristics and types of B2B e-commerce marketplaces. 76) Which of the following statements about Walmart's Global Replenishment System (GRS) is not true? A) GRS is an online analytics package. B) GRS is a just-in-time inventory management system. C) GRS is predictive, not just reflective, of past sales. D) To use GRS and make decisions about order sizes, vendors must first input data to the system in a spreadsheet format. Answer: D Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 77) Trans-organizational business processes require ________ to perform. A) one firm B) two independent firms C) three independent firms D) at least ten firms Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 78) Private B2B networks are direct descendants of: A) e-procurement companies. B) existing EDI networks. C) independent exchanges. D) industry consortia. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 291 Copyright © 2024 Pearson Education, Inc.

79) All of the following are forms of collaboration among businesses except: A) RFQs. B) CPFR. C) demand chain visibility. D) marketing coordination and product design. Answer: A Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 80) Which of the following is not a typical barrier to the implementation of a private B2B network? A) It requires participating firms to share sensitive data. B) It requires the large network owners to give up some of its independence. C) It requires a significant investment of time and money. D) It requires a change of mindset and behavior of employees. Answer: B Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 81) Walmart is both the world's largest retailer and has the world's largest supply chain. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 82) A private B2B network is an independently owned online marketplace that connects many suppliers and buyers. Answer: FALSE Difficulty: Difficult AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 83) Private B2B networks are usually owned collectively by the major firms participating in the network, while exchanges usually are created by a single sponsoring company. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 292 Copyright © 2024 Pearson Education, Inc.

84) Operating on a global scale is one objective of private B2B networks. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation. 85) Discuss the barriers to effective implementation of private B2B networks. Answer: There are a number of barriers to effective implementation of private B2B networks. Participating firms are required to share sensitive data with their business partners, up and down the supply chain. What in the past was considered proprietary and secret, must now be shared. In a digital environment, it can be difficult to control the limits of information sharing. Information a firm freely gives to its largest customer may end up being shared with its closest competitor. Integrating private B2B networks into existing enterprise systems and EDI networks also poses a significant investment of time and money. Although the leading providers of enterprise systems to Fortune 500 companies (Oracle, IBM, and SAP) offer B2B modules, and supply chain management capabilities that can be added to their existing software suites, implementing these modules is a very expensive proposition in part because the procurement side of many Fortune 500 firms is so fragmented and out-of-date. Adopting private B2B networks also requires a change in mindset and behavior for employees. Essentially, employees must shift their loyalties from the firm to the wider trans-organizational enterprise and recognize that their fate is intertwined with the fate of their suppliers and distributors. Suppliers in turn are required to change the way they manage and allocate their resources because their own production is tightly coupled with the demands of their private B2B network partners. All participants in the supply and distribution chains, with the exception of the large network owner, lose some of their independence, and must initiate large behavioral change programs in order to participate. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication Learning Objective: 12.5: Understand the objectives of private B2B networks, their role in supporting collaborative commerce, and the barriers to their implementation.