IS Chapter 9

28) In 2013, approximately what percentage of Internet users over the age of 14 made a purchase at an online retail store? A) 33% B) 53% C) 73% D) 93%

73%

52) Approximately ________ % of the United States labor force is involved in providing services. A) 50 B) 65 C) 75 D) 85

75

57) In ________, all of a customer's financial (and even nonfinancial) data are pulled together at a single personalized Web site. A) account aggregation B) a financial portal C) integrated financial services D) EBPP systems

A) account aggregation

65) Which of the following is not a major trend in the online recruitment services industry? A) disintermediation B) localization C) social networking D) consolidation

A) disintermediation

39) 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.

A) operating income or loss divided by net sales revenues.

59) All of the following statements about the online insurance industry are true except: A) the Internet has dramatically changed the insurance industry's value chain. B) Web sites of almost all the major firms provide the ability to obtain an online quote. C) Internet usage has led to a decline in term life insurance prices industry-wide. D) the industry has been very successful in attracting visitors searching for information.

A) the Internet has dramatically changed the insurance industry's value chain.

38) 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

A) the cost of products being sold

16) Which of the following is not a major trend in online retail for 2013-2014? A) Online retailing is the fastest growing retail channel. B) Lunchtime purchases are the fastest growing time segment for online retail purchases. C) Online retailers increase the use of interactive marketing tools such as blogs and user-generated content. D) Social commerce almost doubles from $3 billion to $5 billion.

B) Lunchtime purchases are the fastest growing time segment for online retail purchases.

55) Which of the following is not one of Amazon's primary business models? A) transaction brokering B) financial services provider C) manufacturer-direct D) content provider

B) financial services provider

49) The term demand-pull 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.

B) waiting for orders to be received before building a product.

27) In 2013, online retail revenues were approximately: A) $2.6 billion. B) $26 billion. C) $260 billion. D) $2.6 trillion.

C) $260 billion.

53) 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

C) an accountant

40) 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

C) earnings before income taxes, depreciation, and amortization (EBITDA)

63) 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

D) airline reservations

47) All of the following are challenges for catalog merchants except: A) high costs of printing and mailing. B) building a credible Web site. C) the need to bring staff in or manage new technology. D) building sophisticated order entry and fulfillment systems.

D) building sophisticated order entry and fulfillment systems.

23) Service industry groups are categorized generally into two groups, those that provide transaction brokering and those that involve: A) retailing goods. B) personalization. C) information brokering. D) providing hands-on services.

D) providing hands-on services.

36) The lower the cost of sales compared to ________, the higher the gross profit. A) assets B) revenue C) gross margin D) operating expenses

Revenue

48) Which of these job recruitment sites is a job site aggregator? A) SimplyHired B) Craigslist C) Monster D) CareerBuilder

SimplyHired

29) Which consumer review aggregator is facing charges that as many as 10 million of its reviews are faked? A) Yelp B) TripAdvisor C) Angie's List D) Porch

TripAdvisor

43) 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.

Working Capital

18) Eight of the top ten fastest-growing e-commerce merchants from 2003 to 2013 were: A) virtual merchants. B) bricks-and-clicks companies. C) catalog merchants. D) manufacturer-direct firms.

bricks-and-clicks companies.

44) Virtual merchants face potentially large costs for all of the following except: A) building and maintaining a Web site. B) building and maintaining physical stores. C) building an order fulfillment infrastructure. D) developing a brand name.

building and maintaining physical stores.

22) 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

electronics and computers

31) 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.

faster delivery of goods.

32) 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

lack of physical store presence

41) Which of the following would not be considered a current asset? A) long-term investments B) cash C) accounts receivable D) marketable securities

long-term investments

42) Current liabilities are debts of the firm that will be due within: A) three months. B) six months. C) one year. D) two years.

one year

21) The MOTO sector of the retail industry is most similar to the ________ sector. A) specialty stores B) general merchandise C) online retail sales D) consumer durables

online retail sales

34) 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

synergies

45) All of the following statements about Amazon.com are true except: A) Amazon has achieved success by focusing on its primary mission: selling books at highly competitive prices. B) Amazon leases its own computing power to other companies. C) eBay can be considered a competitor of Amazon's. D) the Kindle is the best-selling product in Amazon's history.

A) Amazon has achieved success by focusing on its primary mission: selling books at highly competitive prices.

54) All of the following services require extensive personalization except: A) financial services. B) legal services. C) medical services. D) accounting services.

A) financial services.

26) 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) Web 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.

A) new, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.

51) Which of the following has experienced the most significant online growth? A) offline general merchandisers B) virtual merchants C) catalog merchants D) manufacturer-direct firms

A) offline general merchandisers

61) Craigslist is a player in which of the following online services market? A) real estate services and career services B) insurance services and brokerage services C) travel services D) online accounting services

A) real estate services and career services

58) 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

A) term life insurance

64) 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) Online travel services is one of the few sectors 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.

B) Online travel services is one of the few sectors in which extensive disintermediation has occurred.

50) 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.

B) high cost structures.

24) All of the following statements about the MOTO sector are true except: A) compared to general merchandisers, the transition to e-commerce has been easier for MOTO firms. B) the MOTO sector is also referred to as the specialty store sector. C) MOTO was the last technological revolution that preceded e-commerce. D) distribution of catalogs is one of MOTO retailers' biggest expenses.

B) the MOTO sector is also referred to as the specialty store sector.

62) 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 has historically been more technology-reliant. 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 rely on face-to-face communication and barter.

C) Much of the value in services is based on the collection, storage, and exchange of information.

56) Which of the following statements about online banking is not true? A) Top mobile banking activities include paying bills and depositing checks. B) Online and mobile banking transactions incur radically lower transaction costs than in-person transactions. C) Online banking is beginning to displace national banks. D) Online banking is the primary banking channel for all ages.

C) Online banking is beginning to displace national banks.

46) All of the following are challenges faced by bricks-and-clicks firms except: A) coordinating prices across channels. B) handling returns of Web purchases at retail outlets. C) building a credible Web site. D) building a brand name.

D) building a brand name.

60) All of the following statements about the online real estate services market are true except: A) the major impact of Internet real estate sites is in influencing offline decisions. B) real estate differs from other types of online financial services because it is impossible to complete a property transaction online. C) the primary service offered by real estate sites is a listing of houses available. D) the Internet and e-commerce have created significant disintermediation in the real estate marketplace.

D) the Internet and e-commerce have created significant disintermediation in the real estate marketplace.

19) Within the United States retail market, personal consumption of ________ accounts for the largest share. A) durable goods B) general merchandise C) online retail

Durable goods

35) 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

Power of customers

37) 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.

divided by net sales revenues.

33) Which of the following is not one of the methods used by traditional retailers to develop multi-channel integration? A) online Web catalog B) online order, in-store pickup C) online supply-push D) online promotions for offline purchases

online supply-push

25) All of the following were factors that precipitated the growth of MOTO except: A) the national toll-free call system. B) the growth of the cellular phone industry. C) falling long distance telecommunications prices. D) the growth of the credit card industry.

the growth of the cellular phone industry.

20) Comparison shopping sites drive approximately ________ % of e-commerce. A) 15 B) 30 C) 50 D) 75

15

30) The top 10 retailers account for about ________ % of all online retail. A) 30 B) 50 C) 70 D) 90

50

17) Personal consumption of retail goods and services accounts for approximately ________ % of the United States GDP. A) 15 B) 25 C) 50 D) 70

70