E-commerce 2016: Business. Technology. Society., 12e (Laudon)
Chapter 1 The Revolution Is Just Beginning
1) E-commerce can be defined as:
A) the use of the Internet, the Web, and mobile apps to transact business.
B) the use of any Internet technologies in a firm's daily activities.
C) the digital enablement of transactions and processes within an organization.
D) any digitally enabled transactions among individuals and organizations.
Answer: A
Difficulty: Easy
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
2) Which of the following is an example of e-business?
A) Amazon's inventory control system
B) the Amazon.com Web site
C) an Amazon mobile app
D) Amazon's Pinterest page
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
3) Which of the following terms 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
LO: 1.1: Define e-commerce and describe how it differs from e-business.
4) The term e-commerce refers to the digital enabling of transactions and processes involving an
exchange of value across organizational boundaries.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
5) E-commerce and e-business systems blur together at the business firm boundary, at the point
at which internal business systems link up with suppliers or customers.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
LO: 1.1: Define e-commerce and describe how it differs from e-business.
1
Copyright © 2017 Pearson Education, Inc.
,6) Explain why a firm's online inventory control system is an example of e-business rather than
e-commerce. What is the key factor in determining if a transaction is "commerce"?
Answer: E-business refers primarily to digitally enabled transactions within a firm, involving
information systems, such an online inventory control system, under the control of the firm. E-
business does not involve commercial transactions in which an exchange of value across
organizational boundaries takes place. E-commerce, on the other hand, is a revenue-generating
operation. The key factor in determining if a transaction is commerce, therefore, is "exchange of
value." In order to be e-commerce, a transaction must include the direct production of revenue.
Difficulty: Easy
AACSB: Analytical thinking; Written and oral communication
LO: 1.1: Define e-commerce and describe how it differs from e-business.
7) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
8) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
9) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
2
Copyright © 2017 Pearson Education, Inc.
,10) Which of the following is the best definition of transaction cost?
A) the expense of changing national or regional prices
B) the cost of participating in a market
C) the cost of finding suitable products in the market
D) the cost merchants pay to bring their goods to market
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
11) In 2015, the world's online population was estimated to be around:
A) 310 million.
B) 3.1 billion.
C) 31 billion.
D) 310 billion.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
12) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
13) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
3
Copyright © 2017 Pearson Education, Inc.
, 14) Interactivity in the context of e-commerce provides which of the following functionalities?
A) the ability to physically touch and manipulate a product
B) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
15) The costs incurred by merchants in having to change product prices (such as the costs of
reentering prices into computer systems) are referred to as which of the following?
A) subscription costs
B) fixed costs
C) menu costs
D) variable costs
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
16) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
17) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
4
Copyright © 2017 Pearson Education, Inc.
Chapter 1 The Revolution Is Just Beginning
1) E-commerce can be defined as:
A) the use of the Internet, the Web, and mobile apps to transact business.
B) the use of any Internet technologies in a firm's daily activities.
C) the digital enablement of transactions and processes within an organization.
D) any digitally enabled transactions among individuals and organizations.
Answer: A
Difficulty: Easy
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
2) Which of the following is an example of e-business?
A) Amazon's inventory control system
B) the Amazon.com Web site
C) an Amazon mobile app
D) Amazon's Pinterest page
Answer: A
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
3) Which of the following terms 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
LO: 1.1: Define e-commerce and describe how it differs from e-business.
4) The term e-commerce refers to the digital enabling of transactions and processes involving an
exchange of value across organizational boundaries.
Answer: TRUE
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.1: Define e-commerce and describe how it differs from e-business.
5) E-commerce and e-business systems blur together at the business firm boundary, at the point
at which internal business systems link up with suppliers or customers.
Answer: TRUE
Difficulty: Easy
AACSB: Information technology
LO: 1.1: Define e-commerce and describe how it differs from e-business.
1
Copyright © 2017 Pearson Education, Inc.
,6) Explain why a firm's online inventory control system is an example of e-business rather than
e-commerce. What is the key factor in determining if a transaction is "commerce"?
Answer: E-business refers primarily to digitally enabled transactions within a firm, involving
information systems, such an online inventory control system, under the control of the firm. E-
business does not involve commercial transactions in which an exchange of value across
organizational boundaries takes place. E-commerce, on the other hand, is a revenue-generating
operation. The key factor in determining if a transaction is commerce, therefore, is "exchange of
value." In order to be e-commerce, a transaction must include the direct production of revenue.
Difficulty: Easy
AACSB: Analytical thinking; Written and oral communication
LO: 1.1: Define e-commerce and describe how it differs from e-business.
7) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
8) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
9) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
2
Copyright © 2017 Pearson Education, Inc.
,10) Which of the following is the best definition of transaction cost?
A) the expense of changing national or regional prices
B) the cost of participating in a market
C) the cost of finding suitable products in the market
D) the cost merchants pay to bring their goods to market
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
11) In 2015, the world's online population was estimated to be around:
A) 310 million.
B) 3.1 billion.
C) 31 billion.
D) 310 billion.
Answer: B
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
12) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
13) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
3
Copyright © 2017 Pearson Education, Inc.
, 14) Interactivity in the context of e-commerce provides which of the following functionalities?
A) the ability to physically touch and manipulate a product
B) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
15) The costs incurred by merchants in having to change product prices (such as the costs of
reentering prices into computer systems) are referred to as which of the following?
A) subscription costs
B) fixed costs
C) menu costs
D) variable costs
Answer: C
Difficulty: Moderate
AACSB: Application of knowledge
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
16) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
17) 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
LO: 1.2: Identify and describe the unique feature of e-commerce technology and discuss their
business significance.
4
Copyright © 2017 Pearson Education, Inc.
