1) Capabilities of the Internet that have made it more difficult for companies to capture profits

include all of the following except:

a. the Internet makes information widely available.

b. the Internet reduces the difficulty of purchasing, marketing, and distribution.

c. the Internet allows buyers and sellers to find and transact business with one another

more easily.

d. the Internet makes it easier to make secure payments.

2) All of the following are situations when a business plan should be done except:

a. when an existing business is deploying a CRM system.

b. when a new business is seeking start-up funds and other resources.

c. when an existing company is planning to create a separate division.

d. when an existing company is planning to launch the company in a new direction.

3) The most efficient way to expand an organization s scope is _____________.

a. to introduce new products or services into new or existing markets without increasing

production facilities or staff.

b. by increasing the size or scale of the business.

c. by expanding the firm s appeal to a new set of customers.

d. to buy a company with complementary products or services.

4) _____________ are the hottest applications in today s business environment.

a. Virtual worlds

b. Rich media

c. Social networking technologies

d. Online brands

5) All of the following determine the degree of collaboration between offline and online activities in a business except:

a. corporate culture.

b. the ability of top management to introduce change properly.

c. the pricing strategy.

d. the use of innovative processes that support collaboration.

6) The ____________ pricing strategy means adding up all the costs involved, such as material,

labor, rent, overhead, and so forth and adding a percentage mark-up as profit.

a. cost-plus

b. competitor model

c. revenue markup

d. price percentage

7) Implementing EC often requires significant investments in infrastructure. Therefore, a good way to start is to undertake ____________.

a. a large, non-trivial EC project

b. one or a few small EC pilot projects

c. a multi-divisional EC project

d. a single division EC project

8) A ________ is a form of business alliance composed of several business partners that share the costs and resources for the development or production of a product or service.

a. temporary corporation

b. supply chain

c. virtual corporation

d. co-opetition

9) With the balanced scorecard approach, the term balance arises because the combined set of

measures is supposed to encompass indicators that are all of the following except:

a. core and non-core.

b. financial and nonfinancial.

c. leading and lagging.

d. quantitative and qualitative.

10) The relationship between EC investment and organizational performance is _____________.

a. direct

b. indirect

c. shared with other investments

d. not measurable

11) The New York Metropolitan Transit Authority (MTA) did not need to open another airport for

almost two decades, even though air traffic had tripled because of productivity gains derived

from improved IT systems. IT systems added by the MTA played critical roles in ticket

reservations, passenger and luggage check-in, crew assignment and scheduling, runway

maintenance and management, and gate assignments. This case illustrates that ___________.

a. intangible benefits can be complex, yet substantial

b. tangible benefits can be complex, yet substantial

c. tangible costs can be high, yet payoffs can be achieved quickly

d. intangible costs can be high, yet payoffs can be achieved quickly

12) Justifying information security projects _____________.

a. is not needed because it is well-known that preventing network security problems is less

labor intensive than cleaning up virus infections.

b. is not done because ROI calculators are not available.

c. should focus on defending against external threats such as hackers and malware.

d. should be done because employee security training is usually poorly done.

13) The average-cost curves (AVC) of physical products and digital products are ____________.

a. different because the AVC of digital products declines as quantity increases forming

L-shape, while the AVC of physical products is U-shaped.

b. both U-shaped.

c. both L-shaped.

d. different because the AVC of physical products declines as quantity increases

forming an L-shape, while the AVC of digital products is U-shaped.

14) All of the following apply to EC in developing economies except:

a. developing economies often face power blackouts and unreliable infrastructure and

delivery mechanisms creating limitations that make it difficult for firms to predict

whether EC investments will pay off and when.

b. developing economies, such as China and India, represent a significant opportunity for

EC to connect businesses to customers, as well as other businesses.

c. developing economies struggle with various issues that create too many business and

technology risks to justify investment in those economies at this time.

d. the potential volume of transactions in developed countries can make EC investments

more attractive for established firms than new firms because established firms have

already recovered the costs of their IT infrastructures.

15) As a company moves to incorporate an online presence with its traditional brick-and-mortar

operation, it adds the costs related to training for all personnel in the capabilities of the EC

system and a new advertising campaign to announce its new site to the costs directly

associated with building the new Web presence. In this case, training and advertising are

examples of ____________.

a. transaction costs

b. complementary investments

c. direct costs

d. indirect costs

16) The greatest difficulty in dealing with venture capital is _____________.

a. the loss of control a venture capitalist demands.

b. finding a willing venture capitalist.

c. finding the money a venture capitalist will require.

d. relocating the business to an incubator.

17) The concept of consistency in Website design includes making sure that _____________.

a. webpages look the same no matter which browser a customer is using.

b. all visitors consistently find what they are looking for.

c. the messages sent to customers who contact the company are consistent.

d. customers are treated consistently when they contact customer service.

18) One of the first decisions to be made in building a Website is _____________.

a. the domain name.

b. whether to provide personalized content.

c. how to protect the Website from hackers.

d. who will host it.

19) Banks are more selective about who gets an account for accepting credit cards online because


a. dot com failures have made banks less willing to work with online companies

b. CNP transactions are less secure and riskier

c. fees are higher for online processing

d. online transactions do not produce much revenue for banks

20) Before choosing the appropriate Website development option, you need to consider all of the

following issues in order to generate a list of requirements and capabilities except:

a. Who are the target customers?

b. What kinds of products or services will the business sell online?

c. Can customers place orders online?

d. What might be the reaction of competitors?

21) Having control over the collection, storage, and dissemination of personal information is

included in the category of _____________.

a. property

b. rights

c. duties

d. privacy

22) A music company can file a _____________ against YouTube and MySpace for any interference with the ability to profit from its IP or for profiting from the recording industry s property without authorization and compensation.

a. criminal charge

b. negligence charge

c. nuisance charge

d. lawsuit or civil charge

23) Section 5 of the FTC Act does each of the following except:

a. prohibits unfair or deceptive EC practices.

b. gives the FTC authority to take action against companies whose lax security practices

could expose customers financial information to theft or loss.

c. protects privacy.

d. requires monitoring of employees e-mail.

24) Companies can improve their responsibility as custodians of customers personal data by

implementing _____________.

a. opt-in and opt-out information practices

b. AUP

c. e-mail monitoring

d. firewalls

25) The _____________ gives law enforcement agencies broader range in their efforts to protect the public.

a. American Civil Liberties Union (ACLU)

b. Electronic Freedom Foundation (EFF)

c. U.S. Department of Justice (DOJ)