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Experiencing MIS, 3e (Kroenke)
Chapter 8: E-Commerce, Web 2.0, and Social Networking
Multiple Choice
1
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
4) Which of the following was a supporting technology of pre-Internet systems?
A) EDI
B) SOA
C) HTML
D) Flash
Answer: A
Page Ref: 184
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 1
2
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
8) What is service-oriented architecture?
A) It is the structure of an organization that heavily emphasizes the importance of superior
customer service.
B) It is a software design methodology related to interorganizational program-to-program
communication.
C) It is the investment in vendor-customer relationships with the expectation of returns in the
marketplace.
D) It is a content structure that has emerged from the processing of many user tags.
Answer: B
Page Ref: 185
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 1
9) The U.S. Census Bureau defines ________ as companies that take title to the goods they sell.
A) merchant companies
B) electronic exchanges
C) clearinghouses
D) auctions
Answer: A
Page Ref: 186
Difficulty: Easy
Study Question: Study Question 2
11) Sales between a supplier and a retail consumer are ________ transactions.
A) B2C
B) B2B
C) B2G
D) C2C
Answer: A
Page Ref: 186
Difficulty: Easy
Study Question: Study Question 2
3
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
12) Jackson Enterprises sells products online to the state-run Environmental Protection Agency.
This is a ________ transaction.
A) B2B
B) B2C
C) B2G
D) C2C
Answer: C
Page Ref: 186
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
13) Amazon.com, REI.com, and LLBean.com are examples of companies that use ________
information systems.
A) B2E
B) B2B
C) B2G
D) B2C
Answer: D
Page Ref: 186
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
14) In a typical distribution system, raw material suppliers sell to manufacturers, manufactures
sell to distributors, and distributors sell to retailers. All these transactions are categorized as
________ transactions.
A) B2C
B) B2B
C) C2C
D) B2E
Answer: B
Page Ref: 186
Difficulty: Moderate
Study Question: Study Question 2
15) Traditional B2C information systems rely on a(n) ________ that customers use to enter and
manage their orders.
A) auction forum
B) electronic exchange
C) clearinghouse
D) Web storefront
Answer: D
Page Ref: 186
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
4
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
16) Which of the following nonmerchant e-commerce companies supports a competitive bidding
process?
A) auctions
B) clearinghouses
C) B2C firms
D) mashups
Answer: A
Page Ref: 187
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
17) ________ provide goods and services at a stated price and arrange for the delivery of the
goods, but they never take title.
A) Auctions
B) E-markets
C) Cyberstores
D) Clearinghouses
Answer: D
Page Ref: 187
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
18) Using e-commerce to buy directly from the manufacturer eliminates the middlemen in the
supply chain. Which of the following terms best explains this elimination?
A) deliberation
B) mashup
C) clearinghouse
D) disintermediation
Answer: D
Page Ref: 187
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
19) ________ measure(s) the amount that demand rises or falls with changes in price.
A) Price ceilings
B) Price fixing
C) Price per earning ratio
D) Price elasticity
Answer: D
Page Ref: 187
Difficulty: Easy
Study Question: Study Question 2
5
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
20) When a business engages in e-commerce, the manufacturer may be able to offer a lower
price and still make a profit, which may cause price conflicts with its traditional channel
members. The ability of the manufacturer to offer a lower price and still make a profit is largely
attributed to ________.
A) emergence
B) price elasticity
C) disintermediation
D) channel conflict
Answer: C
Page Ref: 188
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
21) When HP Computers began to sell directly to the public, some retailers resented the
competition and stopped carrying HP products in their stores. This is an example of ________.
A) reintermediation
B) channel conflict
C) mashups
D) the bullwhip effect
Answer: B
Page Ref: 188
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
22) Which of the following expenses are likely to increase for manufacturers who use e-
commerce to sell directly to consumers?
A) procurement expenses
B) advertising expenses
C) production expenses
D) customer-service expenses
Answer: D
Page Ref: 188
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
26) In the Web 2.0 world, the value of a site increases ________.
A) over time
B) exponentially
C) as the investments in it increase
D) with users and use
Answer: D
Page Ref: 190
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
27) In the Web 2.0 world, no marketing is done. New product features are released and vendors
wait for users to spread the news to one another, one friend sending a message to many friends;
most of whom send that message, in turn, to their friends; and so forth, in a process called
________.
A) affiliate marketing
B) viral marketing
C) co-marketing
D) network marketing
Answer: B
Page Ref: 190
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
7
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
28) On some sites, users can provide customer support to one another, or even participate in the
creation of product specifications, designs, and complete products in a process called ________.
A) social capitalization
B) mashing up
C) crowdsourcing
D) electronic exchanging
Answer: C
Page Ref: 191
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 3
29) Traditional sites are about ________; Web 2.0 is about ________.
A) publishing; participation
B) mash ups; crowdsourcing
C) organic experiences; controlled experiences
D) B2C e-commerce; B2B e-commerce
Answer: A
Page Ref: 191
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
30) When the output from two or more Web sites is combined into a single user experience it is
called a(n)________.
A) social network
B) mashup
C) crowdsource
D) electronic exchange
Answer: B
Page Ref: 191
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
31) Google pioneered Web 2.0 advertising. With its ________ software, vendors pay Google a
certain amount for particular search words.
A) AdSense
B) Adware
C) AdWords
D) AdCap
Answer: C
Page Ref: 192
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
8
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
32) A(n) ________ is a structure of individuals and organizations that are related to each other in
some way.
A) folksonomy
B) electronic exchange
C) social network
D) crowdsource
Answer: C
Page Ref: 193
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 4
33) Karl Marx defined ________ as the investment of resources for future profit.
A) capital
B) business
C) equity
D) returns
Answer: A
Page Ref: 193
Difficulty: Easy
Study Question: Study Question 4
35) Being linked to a network of highly regarded contacts is a form of social ________.
A) credential
B) consciousness
C) mobility
D) commerce
Answer: A
Page Ref: 194
Difficulty: Easy
Study Question: Study Question 4
9
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
36) Which of the following is true about social capital?
A) Social capital is the investment in human knowledge and skills for future profit.
B) The people you know the least contribute the most connections to your network.
C) Social capital can be gained by limiting ones friends but strengthening the relationships with
them.
D) Strong relationships contribute the most to the growth of social capital.
Answer: B
Page Ref: 195
Difficulty: Moderate
Study Question: Study Question 4
37) A ________ is a content structure that has emerged from the processing of many user tags.
A) metalanguage
B) mashup
C) folksonomy
D) bookmark
Answer: C
Page Ref: 198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
38) Which of the following are the characteristics of Enterprise 2.0, according to McAfee?
A) search, links, authoring, tags, extensions, signals
B) speed, LAN, auctions, tags, e-commerce, social capital
C) SOA, LAN, advertising, tags, electronic-exchange, SAAS
D) UGC, SOA, tags, extensions, signals, social CRM
Answer: A
Page Ref: 198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
39) According to McAfee, Enterprise 2.0 workers want applications that enable them to rate
tagged content and to use the tags to predict content that will be of interest to them. This refers to
which of the following characteristics of Enterprise 2.0?
A) search
B) authoring
C) signals
D) extensions
Answer: D
Page Ref: 198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
10
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
40) In Enterprise 2.0, pushing enterprise content to users based on subscriptions and alerts is part
of ________, according to McAfee's Enterprise 2.0 model.
A) signaling
B) authoring
C) tagging
D) searching
Answer: A
Page Ref: 198
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 5
True or False
1) E-commerce is the buying and selling of goods and services exclusively over public computer
networks.
Answer: FALSE
Page Ref: 184
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 1
11
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
5) Gateway Corp. eliminated all its channel members and now sells directly to the public over
the Internet. This is an example of disintermediation.
Answer: TRUE
Page Ref: 187
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
7) Managing prices by direct interaction with the customer yields better information than
managing prices by watching competitors' pricing.
Answer: TRUE
Page Ref: 187
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
8) Without distribution and retailing partners, manufacturer who engages in e-commerce will
have the increased logistics expense of entering and processing orders in small quantities.
Answer: TRUE
Page Ref: 188
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
9) Customer service expenses are likely to decrease for manufacturers that use e-commerce to
sell directly to consumers.
Answer: FALSE
Page Ref: 188
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 2
10) Google, Amazon.com, and eBay exemplify Web 2.0. because they sell software licenses
instead of providing software as a free service.
Answer: FALSE
Page Ref: 189
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
12
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
11) In the case of traditional software vendors, extensive testing and true beta programs precede
every product release.
Answer: TRUE
Page Ref: 190
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 3
12) Traditional software companies use the term software as a service to mean that they will
provide their software products via the cloud.
Answer: TRUE
Page Ref: 190
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 3
14) Crowdsourcing combines social networking, viral marketing, and open-source design, saving
considerable cost while cultivating customers.
Answer: TRUE
Page Ref: 191
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
15) Web 2.0 companies lock down all the legal rights they can.
Answer: FALSE
Page Ref: 192
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 3
16) Not all business information systems benefit from flexibility and organic growth offered by
Web 2.0.
Answer: TRUE
Page Ref: 193
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 3
13
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
17) Social capital is the investment in social relations with the expectation of returns in the
marketplace.
Answer: TRUE
Page Ref: 193
Difficulty: Easy
Study Question: Study Question 4
18) Social capital adds value through information, influence, social credentials, and personal
reinforcement.
Answer: TRUE
Page Ref: 193
Difficulty: Easy
Study Question: Study Question 4
19) Strong relationships contribute the most to the growth of social networks.
Answer: FALSE
Page Ref: 194
Difficulty: Easy
Study Question: Study Question 4
20) According to Henk Flap, the value of social capital is determined by the number of
relationships in a social network, by the strength of those relationships, and by the resources
controlled by those related.
Answer: TRUE
Page Ref: 194
Difficulty: Moderate
Study Question: Study Question 4
21) Historically, organizations have created social capital via salespeople, via customer support,
and via public relations.
Answer: TRUE
Page Ref: 195
Difficulty: Easy
Study Question: Study Question 4
22) With Social CRM, business control the messages, offers, and support that customers receive
based on the value of the customer.
Answer: FALSE
Page Ref: 197-198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
14
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
23) According to McAfee, Enterprise 2.0 workers want to be able to navigate content structures
such as lists and tables of content.
Answer: FALSE
Page Ref: 198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
24) Enterprise 2.0 content is tagged differently from the content on the Web.
Answer: FALSE
Page Ref: 198
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
25) In Social CRM, relationships between organizations and customers are predefined.
Answer: FALSE
Page Ref: 199
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 5
Essay
1) What is e-commerce?
Answer: E-commerce is the buying and selling of goods and services over public and private
computer networks. E-commerce became feasible with the creation and widespread use of
HTTP, HTML, and server applications such as Web storefronts that enabled browser-based
transactions. E-commerce was not only faster than pre-Internet commerce, it also brought
vendors closer to their customers, and in the process changed market characteristics and
dynamics.
Page Ref: 184
Difficulty: Easy
AACSB: Use of IT
Study Question: Study Question 1
15
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
3) What is meant by service-oriented architecture (SOA)?
Answer: Enterprise 2.0 and Social CRM have given a boost to service-oriented architecture
(SOA), which is a software design methodology and set of program communication standards
that greatly improve the flexibility and adaptability of interorganizational program-to-program
communication. SOA standards are meta, metadata. They are standards for defining how
interprogram communication metadata are to be created.
Page Ref: 185
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 1
6) What is disintermediation?
Answer: Disintermediation is the elimination of the middle layers within a supply chain. This
means that the manufacturer eliminates the distributors, wholesalers, and retailer by selling
directly to the consumers. This eliminates inventory-carrying costs, shipping overhead, and
handling activity. Because the distributor and associated inventories have become unnecessary
waste, disintermediation increases market efficiency.
Page Ref: 187
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
16
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
7) How is e-commerce related to price elasticity?
Answer: From the seller's side, e-commerce produces information about price elasticity that has
not been available before. Price elasticity measures the amount that demand rises or falls with
changes in price. Using an auction, a company can learn not just what the top price for an item is,
but also the second, third, and other prices from the losing bids. In this way, the company can
determine the shape of the price elasticity curve. Similarly, e-commerce companies can learn
price elasticity directly from experiments on customers.
Page Ref: 187
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 2
17
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
11) How is the value of social capital determined?
Answer: The value of social capital is determined by the number of relationships in a social
network, by the strength of those relationships, and by the resources controlled by those related.
Page Ref: 194
Difficulty: Easy
Study Question: Study Question 4
18
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
15) What is the difference between traditional CRM and Social CRM?
Answer: In Social CRM, because relationships emerge from joint activity, customers have as
much control as companies. This characteristic is anathema to traditional sales managers who
want control over what the customer is reading, seeing, and hearing about the company and its
products. Further, traditional CRM is centered on lifetime value; customers who are likely to
generate the most business get the most attention and have the most impact on the organization.
But, with Social CRM, the customer who spends 10 cents but who is an effective reviewer,
commentator, or blogger can have more influence than the quiet customers who purchase $10
million a year. Such imbalance is incomprehensible to traditional sales managers.
Page Ref: 199
Difficulty: Moderate
AACSB: Use of IT
Study Question: Study Question 5
19
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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