Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 1 Business Information Systems in Your Career
1) Which of the following is the key business metric behind the technologies implemented by
Kroger, as discussed in the chapter-opening case?
A) Higher customer satisfaction levels
B) Survival
C) Improved employee morale
D) Improved decision making
E) Reduced cost of supplies
Answer: A
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
2) Journalist Thomas Friedman's description of the world as "flat" refers to the:
A) flattening of economic and cultural advantages of developed countries.
B) use of the Internet and technology for instantaneous communication.
C) reduction in travel times and the ubiquity of global exchange and travel.
D) growth of globalization.
E) increased use of global currencies.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
3) The six important business objectives of information system investment include all of the
following except:
A) competitive advantage.
B) employee morale.
C) improved decision making.
D) survival.
E) new products.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
1
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4) A firm that invests in an information system because it is a necessity of doing business does so
because it is seeking to achieve which of the following business objectives?
A) Survival
B) Improved decision making
C) Competitive advantage
D) Operational excellence
E) Customer intimacy
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
5) Walmart exemplifies the power of information systems coupled with excellent business
practices and supportive management to achieve which of the following?
A) New business models
B) Operational efficiency
C) Customer intimacy
D) Competitive advantage
E) Survival
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-1: Why are information systems so essential for running and managing a business today?
6) Verizon's implementation of a web-based digital dashboard to provide managers with realtime information, such as customer complaints, is an example of:
A) improved flexibility.
B) improved decision making.
C) competitive advantage.
D) supplier intimacy.
E) a new product.
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
7) Which business objective were competitors seeking when they rushed to provide ATMs after
Citibank introduced the first ATMs in New York?
A) Improved efficiency
B) Customer and supplier intimacy
C) Survival
D) Competitive advantage
E) Improved decision making
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
2
Copyright © 2019 Pearson Education, Ltd.
8) All of the following describe the effects of globalization except:
A) significant decreases in operating costs.
B) reduction of labor costs through outsourcing.
C) ability to find low-cost suppliers.
D) increases in transaction costs.
E) replication of business models in multiple countries.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-1: Why are information systems so essential for running and managing a business today?
9) A firm that must invest in a new information system in order to comply with federal
legislation is investing to achieve which of the following business objectives?
A) Customer intimacy
B) Operational excellence
C) New products.
D) Improved decision making
E) Survival
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
10) Which of the following is an example of a business using information systems to create new
products and services?
A) Apple's creation of the iPad
B) JCPenney's information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced
C) The Mandarin Oriental's use of computers to keep track of guests' preferences
D) Verizon's web-based digital dashboard providing real-time company information for
managers
E) Walmart's Retail Link system
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
3
Copyright © 2019 Pearson Education, Ltd.
11) An example of a business using information systems for supplier intimacy is:
A) Apple's creation of the iPad.
B) JCPenney's information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced.
C) Citibank's ATM system.
D) Verizon's web-based digital dashboard providing real-time company information for
managers.
E) the Mandarin Oriental's use of computers to keep track of guests' preferences.
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
12) To make sure it stocks clothes that its customers will purchase, a department store
implements a new application that analyzes spending levels at its stores and cross-references this
data to popular clothing styles. Which of the following business objectives is this information
intended to support?
A) New products
B) Survival
C) Customer intimacy
D) Improved decision making
E) Operational excellence
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
13) Telepresence is an example of which of the following?
A) Business intelligence
B) Social business
C) IoT
D) Mobile digital platform
E) Virtual meeting
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
4
Copyright © 2019 Pearson Education, Ltd.
14) The enormous volume of data generated by Internet activity, such as web traffic, email, and
social media is referred to as:
A) IoT.
B) big data.
C) the mobile digital platform.
D) cloud computing.
E) business intelligence.
Answer: B
Difficulty: 1: Easy
AACSB: Analytical Thinking; Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
15) E-commerce and Internet advertising reached $83 billion in 2017, growing at about:
A) 5 percent.
B) 10 percent.
C) 15 percent.
D) 20 percent.
E) 25 percent.
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
16) What percent of employed Americans report spending some time working remotely?
A) 13 percent
B) 23 percent
C) 33 percent
D) 43 percent
E) 53 percent
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
17) All of the following are new technology-related trends in MIS except:
A) cloud computing.
B) big data.
C) IoT.
D) the mobile digital platform.
E) co-creation of business value.
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
5
Copyright © 2019 Pearson Education, Ltd.
18) Which of the following statements is not true?
A) In 2016, American businesses invested nearly $2.8 trillion in information systems hardware,
software, and telecommunications equipment.
B) In 2016, American businesses spent $800 billion on business and management consulting and
information technology services.
C) In 2016, about 25 percent of all capital investment in the United States was for information
systems hardware, software, and telecommunications equipment.
D) Expenditures in the United States for information systems are growing at a faster rate than the
U.S. economy as a whole.
E) Worldwide, non-U.S. expenditures for information technology exceeded $3.5 trillion.
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
19) Approximately how many adult Americans are online?
A) 118 million
B) 173 million
C) 205 million
D) 220 million
E) 273 million
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
20) What percent of the Fortune 500 companies uses Twitter to communicate with their
customers?
A) 20 percent
B) 40 percent
C) 50 percent
D) 60 percent
E) 80 percent
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
21) Purchase of information systems hardware, software, and telecommunications equipment
will constitute more than half of all capital investment in the United States in 2017.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-1: Why are information systems so essential for running and managing a business today?
6
Copyright © 2019 Pearson Education, Ltd.
22) A business model describes how a company produces, delivers, and sells a product or service
to create wealth.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
23) Federal law requires many businesses to keep email messages for ten years.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-1: Why are information systems so essential for running and managing a business today?
24) Define operational excellence. How can information systems help achieve it?
Answer: Operational excellence is the achievement of higher levels of productivity and
efficiency. Information systems can help achieve operational excellence by improving
communications to suppliers and optimizing the supply chain. Information systems could help
managers communicate with workers more efficiently, enable technological innovation in
products, minimize warehouse overhead, and streamline distribution.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication; Reflective Thinking
LO: 1-1: Why are information systems so essential for running and managing a business today?
25) You work for an auto manufacturer and distributor. How could you use information systems
to achieve greater customer intimacy?
Answer: You could create a website that allows customers to customize cars, communicate with
support personnel and other car owners. You could create an automated email service reminding
car owners to take their car in for periodic check-ups. You could have an information system that
tracks customer preferences in local areas, so you can provide cars that reflect local customer
needs and desires.
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 1-1: Why are information systems so essential for running and managing a business today?
7
Copyright © 2019 Pearson Education, Ltd.
26) Which of the following is the best definition of an information system?
A) A set of interrelated components that collect (or retrieve), process, store, and distribute
information to support decision making and control in an organization
B) Computers, keyboards, printers, and telecommunications devices
C) A set of detailed programmed instructions that transform raw data into information
D) Physical devices and software that can be connected to share voice, data, images, sound, and
video
E) A global network that uses universal standards
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
27) The three activities in an information system that produce the information organizations use
to control operations are:
A) information, research, and analysis.
B) input, output, and feedback.
C) input, processing, and output.
D) data analysis, processing, and feedback.
E) information, data, and processing.
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
28) The average number of baseball tickets sold at a particular price is an example of:
A) input.
B) raw data.
C) meaningful information.
D) output.
E) feedback.
Answer: C
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
8
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29) Output:
A) is feedback that has been processed to create meaningful information.
B) is information that is returned to appropriate members of the organization to help them
evaluate the input stage.
C) transfers raw data to the people who will use it or to the activities for which it will be used.
D) transfers processed information to the people who will use it or to the activities for which it
will be used.
E) is a stream of raw facts representing events occurring in organizations or the physical
environment.
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
30) Converting raw data into a more meaningful form is called:
A) capturing.
B) processing.
C) organizing.
D) feedback.
E) inputting.
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
31) Which of the following is an example of raw data from an automobile manufacturer?
A) An average of 130 Subarus sold daily in New York in 2017
B) 1,300 Subaru Outbacks sold during the first quarter 2017 in New York
C) One Subaru Outback sold January 7, 2017 in Mount Kisco, New York for $25,000
D) Annual sales of Subaru Outbacks increased 4.5 percent
E) An average sale price of $26,000 for all Subaru Outbacks sold during January 2017 in Mount
Kisco, New York
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
9
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32) Which of the following fields deals with behavioral issues, as well as technical issues
surrounding the development, use, and impact of information systems used by managers and
employees in the firm?
A) Information systems literacy
B) Information systems architecture
C) Management information systems
D) Information technology infrastructure
E) Computer information systems
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
33) All of the following are examples of environmental actors in an information system except:
A) customers.
B) stockholders.
C) feedback.
D) competitors.
E) regulatory agencies.
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
34) In a hierarchical organization, the upper levels consist of:
A) managerial, professional and knowledge workers.
B) managerial, professional, and technical workers.
C) professional and operational workers.
D) managerial, professional, and operational workers.
E) knowledge, technical and operational workers.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
10
Copyright © 2019 Pearson Education, Ltd.
35) The fundamental set of assumptions, values, and ways of doing things that has been accepted
by most of a company's members is called its:
A) business process.
B) environment.
C) atmosphere.
D) values.
E) culture.
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
36) All of the following can be considered managerial responsibilities except:
A) making action plans to solve organizational problems.
B) creating new products and services.
C) designing new information systems.
D) allocating human resources to coordinate the work to be done.
E) setting strategy for responding to business challenges in the environment.
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
37) Data management technology consists of the:
A) physical hardware and media used by an organization for storing data.
B) detailed, preprogrammed instructions that control and coordinate the computer hardware
components in an information system.
C) software governing the organization of data on physical storage media.
D) hardware and software used to transfer data.
E) universally accepted standards for storing data.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
11
Copyright © 2019 Pearson Education, Ltd.
38) Intranets:
A) are based on mainframe technology.
B) are multiple networks joined together.
C) are typically used to communicate with the business's trusted vendors.
D) use Internet technology for a private company network.
E) provide the platform on which a firm builds its information systems.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
39) As described in the chapter case, which of the following constitutes an organizational
element in the UPS tracking system?
A) The specification of procedures for identifying packages with sender and recipient
information
B) Monitoring service levels
C) Promoting the company strategy of low-cost, superior service
D) The use of handheld computers and networks for managing package delivery
E) Routing software that creates the most efficient delivery route for each driver
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
40) As described in the chapter case, which of the following constitutes a people element of the
UPS tracking system?
A) The web-based Post Sales Order Management System
B) The ability to provide package status reports to customers
C) The decision to use automation
D) The implementation of in-house package tracking software
E) The ability to embed UPS functions in external sites
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
12
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41) A moving company has an information system that analyzes travel patterns and decides
which routes are the most efficient for every van. The need for employees to follow procedures
to update this system with arrival and departure times is a(n) ________ dimension of the system.
A) organizational
B) managerial
C) people
D) technology
E) cultural
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
42) The culture of UPS places service to the customer among the company's highest business
objectives, which is reflected in its use of information systems to enable customer tracking of
their packages. Based on your reading of Chapter 1, why is "culture" an important factor to
consider when building information system solutions to business problems?
A) Culture is one element that can be radically changed, not always for the better, by new
information systems.
B) Culture affects how information system solutions are implemented and used.
C) Culture is a cauldron of employee perspectives and conflicts, which can be used to improve
business processes.
D) Culture is the driving force behind decision making and innovation.
E) Culture is the basis for organizational politics.
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
43) Which of the following is a global network that uses universal standards to connect millions
of different networks around the world?
A) An extranet
B) The World Wide Web
C) The Internet
D) An intranet
E) Verizon
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
13
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44) ________ consists of detailed, preprogrammed instructions that control and coordinate the
computer hardware components in an information system.
A) Software
B) Programming
C) Enterprise applications
D) Business intelligence
E) Data management technology
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
45) ________ is a service provided by the Internet that uses universally accepted standards for
storing, retrieving, formatting, and displaying information in a page format.
A) FTP
B) Email
C) The World Wide Web
D) HTML
E) An extranet
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
46) Information systems contain information about significant people, places, and things within
the organization or in the environment surrounding it.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
47) Firms use extranets to coordinate their activities with other firms for making purchases,
collaborating on design, and performing other interorganizational work.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
14
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48) Information systems literacy describes the behavioral approach to information systems, while
computer literacy describes the technical approach.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
49) People, organizations, and information technology are all dimensions of information
systems.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
50) In order to understand how a specific business firm uses information systems, you need to
know something about the history and culture of the company.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
51) Developing a new product, fulfilling an order, and hiring a new employee are all examples of
business processes.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
52) Business processes are logically related tasks for accomplishing work that have been
formally encoded by an organization.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
53) Employee attitudes about their jobs, employers, or technology can have a powerful effect on
their abilities to use information systems productively.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
15
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54) A network requires at least three computers and a shared resource.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
55) A firm's IT infrastructure provides the platform on which the firm can build its information
systems.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
56) UPS's use of web-based tools that allow customers to embed UPS functions, such as tracking
and cost calculations, into their own websites, described in the chapter case, is an information
systems solution used to achieve customer intimacy.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
57) Data is information that has been shaped into a form that is meaningful to human beings.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
58) Feedback is a specific type of output.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
59) Intranets are private corporate networks extended to authorized users outside the
organization.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
16
Copyright © 2019 Pearson Education, Ltd.
60) What important managerial function is impaired by not having access to timely and accurate
information? What is the effect of this lack of data?
Answer: The managerial function is decision making. Without access to timely and accurate
information, business managers rely on forecasts, best guesses, and luck. The result is over- or
under-production of goods and services, misallocation of resources, and poor response times.
The potential poor outcomes can raise costs, and the company can lose customers.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
61) Describe the people dimension of information systems and give an example. Is this
dimension as vital as the technology dimension when considering a technology-based solution to
a business problem?
Answer: The people dimension describes all of the factors related to employees, from
operational personnel to senior management. Essentially, an organization and its information
systems are worthless without skilled employees. For example, a people dimension of
implementing a new information system is ensuring users are properly trained to use the system.
The people dimension is just as vital as the other dimensions - the success of an information
system depends on the people implementing and operating it. In addition, as a resource,
employees are expensive to hire, manage, and train, whereas technology and hardware can be
relatively inexpensive.
Difficulty: 2: Moderate
AACSB: Reflective Thinking; Information Technology; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
62) You are a marketing manager for a national movie theater chain. Give an example of data
that your department could use for creating meaningful information. What type of information
could that data produce?
Answer: Movie ticket sales from individual theaters would be an example of raw data.
Meaningful information from this would be: average number of tickets sold to seniors on certain
days of the week.
Difficulty: 1: Easy
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
63) Define a business process. What might be a business process used at a hospital?
Answer: A business process is a set of logically related tasks and behaviors for accomplishing
work. Hiring a new employee, customer intake, and filing medical records are examples of
business processes at a hospital.
Difficulty: 2: Moderate
AACSB: Reflective Thinking; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
17
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64) What is the difference between information technology and information systems?
Answer: Information technology (IT) consists of all the hardware and software that a firm needs
to use to achieve its business objectives. Information systems are more complex. An information
system can be defined technically as a set of interrelated components that collect (or retrieve),
process, store, and distribute information to support decision making and control in an
organization.
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
65) This chapter discusses how each organization has its own culture and sets of values shared
by most of its members. What kind of shared values might you find at a law firm?
Answer: Shared values at a law firm might be: The legal system works, the legal system is fair,
lawyers help people, and people need help with the legal system because it is complicated.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
66) Why is the building of a house an appropriate analogy for the building of an information
system?
Answer: Houses are built with hammers, nails, and wood, but these alone do not make a house.
The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of
these features are part of the house and are crucial for solving the problem of putting a roof over
one's head. Computers and programs are the hammer, nails, and lumber of computer-based
information systems, but alone they cannot produce the information a particular organization
needs. To understand information systems, you must understand the problems they are designed
to solve, their architectural and design elements, and the organizational processes that lead to
these solutions.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 1-2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
18
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67) A database into which employees manually input customer names and addresses is riddled
with errors and you have been charged with rectifying the situation. In considering the
organizational dimensions of this problem, you should consider the:
A) skill levels of the employees inputting the data.
B) training given to the employees inputting the data.
C) business processes in place governing the manual input of the data.
D) types of automatic error checking provided by the input software.
E) storage capacity of the database.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Information Technology
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
68) The first step in the model of business problem solving discussed in the chapter is:
A) interviewing the people involved in the problem.
B) identifying the problem.
C) outlining the problem's causes.
D) assigning the problem to a problem solver.
E) evaluating possible solutions to the problem.
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
69) Outdated software is an example of the ________ dimension of business problems.
A) technology
B) organizational
C) people
D) management
E) cultural
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
19
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70) Work environment is an example of the ________ dimension of business problems.
A) management
B) organizational
C) people
D) technology
E) cultural
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
71) You are a new manager at a plumbing supply manufacturer where there are an unusually
high number of returns for a new aerator used in the production of high-end faucets. In
examining the problem, you determine that the primary cause is the improperly designed die cast
for the aerator. Which dimension of a business problem does this reflect?
A) People
B) Technology
C) Management
D) Organizational
E) Cultural
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
72) Inadequate resources are an example of the ________ dimension of business problems.
A) management
B) organizational
C) people
D) infrastructure
E) cultural
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
20
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73) The owners of Speed-EZ, a new bike messenger service, are concerned about how they will
manage their messengers once the messengers have left the office. This is a business problem
that falls into the:
A) management dimension.
B) people dimension.
C) organizational dimension.
D) technology dimension.
E) cultural dimension.
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
74) Flapjack Flats, a new pancake restaurant chain, is having difficulty finding pancake chefs.
This is a business problem that falls into the:
A) management dimension.
B) people dimension.
C) organizational dimension.
D) technical dimension.
E) cultural dimension.
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
75) In choosing the best solution for a business problem, all of the following are important
considerations except:
A) the cost of the solution.
B) the feasibility of the solution given existing resources and skills.
C) the length of time to implement the solution.
D) the attitudes of employees.
E) the ability to forget about the problem once it has been solved.
Answer: E
Difficulty: 3: Challenging
AACSB: Reflective Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
21
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76) The final step in the four-step model of business problem solving is:
A) outcome.
B) implementation.
C) change management.
D) feedback.
E) employee retraining.
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
77) Which of the following would not be considered part of the implementation phase of
problem solving?
A) Change management
B) Purchasing hardware for an information systems solution
C) Training an employee on new systems software
D) Evaluating a selection of software packages for implementing a new business process
E) Determining the attitude of employees about the solution
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
78) The failure of NASA's initial solution to preventing the space shuttle shedding foam
illustrates the:
A) importance of training employees on new business processes.
B) need to prepare for measuring outcomes of a business solution.
C) continuous nature of problem solving.
D) need to quickly adapt to new technological innovations.
E) importance of organizational change in problem solving.
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
22
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79) Perhaps the most frequent error in problem solving is:
A) rushing to judgment about the nature of a problem.
B) not being aware of personal limitations.
C) being too doubtful.
D) following a rote pattern of decision making.
E) failing to consider all dimensions of a problem.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
80) Assume you work for a package delivery service in a major metropolitan area and that the
business has been losing customers for several years. You have been asked to find a solution to
this problem. What is the correct way to proceed?
A) Look for solutions, evaluate the solutions, identify the problem more clearly, and then
implement the solution.
B) Think about what solutions can be implemented, look for solution designs, evaluate the
designs, and then implement the solution.
C) Identify the problem, design alternative solutions, choose the best solution, and then
implement the solution.
D) Design solutions, evaluate and identify the problems, choose the best solution, and then
implement the solution.
E) Identify relevant information technologies, interview employees, choose a technology, and
implement the technology.
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Application of Knowledge; Information Technology
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
81) Which are the three major dimensions of business problem solving?
A) Organizational dimensions, people dimensions, and technology dimensions
B) Organizational dimensions, people dimensions, and environmental dimensions
C) People dimensions, technology dimensions, and environmental dimensions
D) Technology dimensions, organizational dimensions, and environmental dimensions
E) Organizational dimensions, technology dimensions, and cultural dimensions
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
23
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82) Identifying a problem includes agreeing that a problem exists.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
83) An unsupportive culture is an example of the people dimension of business problems.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
84) Encouraging employees to adapt to new business processes is an important factor in change
management.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
85) Describe the four steps taken in solving a business problem.
Answer: The four steps are problem identification, solution design, choice of a solution, and
implementation. In the problem identification step, relevant people in an organization must agree
that a problem exists, what the problem is, what its causes are, and what can be done about the
problem given the organization's resources. In the solution design step, as many solutions as
possible should be determined. In the choice step, you choose the best solution from the list of
options determined in the previous step. It is important to match a choice to existing resources,
skills, and feasibility. In the last step, implementation, the solution is put in place. In information
systems solutions, this may include purchasing hardware or software and testing it.
Implementation also includes employee training, change management, and using a method to
measure the outcome.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Written and Oral Communication
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
24
Copyright © 2019 Pearson Education, Ltd.
86) What are the three dimensions of business problems? Give an example of each.
Answer:
(1) Organizational: This may include outdated business processes, unsupportive culture and
attitudes, political conflict, turbulent business environment and change, complexity of task,
inadequate resources.
(2) Technology: This may include insufficient or aging hardware, outdated software, inadequate
data management, insufficient telecommunications capacity, incompatibility of old systems with
new technology, and rapid technological change.
(3) People: This may include lack of employee training, difficulties in evaluation performance,
legal and regulatory compliance, work environment, lack of employee support and participation,
indecisive management, or poor management.
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
87) The department chain you work for has had numerous complaints about slow customer
service. Your colleague, a sales manager, informs you that this happened at a previous store she
worked for, and it was cleared up by hiring more sales representatives. Should you take her
advice? Why or why not? What techniques can you use in evaluating the problem?
Answer: The advice should not be taken, as it is a rush to judgment, which could mean that the
wrong solution is used, wasting time and resources. You should ask the colleague to employ
critical thinking. Critical thinking is sustained suspension of judgment with an awareness of
multiple perspectives and alternatives. It involves at least four elements:
• Maintaining doubt and suspending judgment
• Being aware of different perspectives
• Testing alternatives and letting experience guide
• Being aware of organizational and personal limitations
Difficulty: 3: Challenging
AACSB: Interpersonal Relations and Teamwork
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
25
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88) How does critical thinking relate to the problem-solving process?
Answer: Simply following a rote pattern of decision making, or a model, does not guarantee a
correct solution. The best protection against incorrect results is to engage in critical thinking
throughout the problem-solving process.
Perhaps the most frequent error in problem solving is to arrive prematurely at a judgment about
the nature of the problem. By doubting all solutions at first and refusing to rush to a judgment,
you create the necessary mental conditions to take a fresh, creative look at problems and you
keep open the chance to make a creative contribution.
Second, it is important to recognize that all interesting business problems have many dimensions
and that the same problem can be viewed from different perspectives such as the technology
perspective, the organization perspective, and the people perspective.
The third element of critical thinking involves testing alternatives, or modeling solutions to
problems, and letting experience be the guide. Not all contingencies can be known in advance
and much can be learned through experience. Therefore, it is important to experiment, gather
data, and reassess the problem periodically.
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 1-3: How will a four-step method for business problem solving help you solve information
system-related problems?
89) Which of the following is an important skill for an accounting major?
A) An understanding of online transaction and reporting systems
B) An understanding of product management enterprise systems
C) An understanding of supplier management enterprise systems
D) An understanding of enterprise systems that enhance leadership
E) An understanding of enterprise systems for customer relationship management
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
90) Which of the following is an important skill for a marketing major?
A) An understanding of online transaction and reporting systems
B) An understanding of product management enterprise systems
C) An understanding of supplier management enterprise systems
D) An understanding of enterprise systems that enhance leadership
E) An understanding of financial reporting systems
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
26
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91) What is the estimated growth rate for information systems managers' jobs through 2024?
A) 5%
B) 8%
C) 12%
D) 15%
E) 17%
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
92) Financial managers work directly with ________ to ensure investments in information
systems help achieve corporate goals.
A) operations managers
B) senior managers
C) marketing managers
D) accounting managers
E) knowledge workers
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
93) Which of the following statements is not true?
A) The most common and successful offshore outsourcing projects involve production
programming and system maintenance programming work, along with call center work.
B) Inflation in Indian and Chinese wages for technology work is leading to a counter movement
of some IT jobs back to the United States.
C) Outsourcing has actually accelerated the development of new systems in the United States by
reducing the cost of building and maintaining them.
D) The impact of domestic IT outsourcing has been very disruptive to some regional areas of the
United States.
E) Management and organizational tasks required in systems development usually are not
outsourced.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
94) As a result of new public laws, accountants require an intimate knowledge of databases,
reporting systems, and networks.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
27
Copyright © 2019 Pearson Education, Ltd.
95) IT managerial jobs are outsourced easily because of the universal standards used by the
Internet.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
96) An understanding of enterprise-wide systems for customer relationship management is one
of the skills relevant to careers in marketing.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
97) Whereas marketing and financial careers have been transformed by the growth in
information systems, thus far managerial positions have remained relatively unaffected.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 1-4: What information systems skills and knowledge are essential for business careers?
98) There are two types of outsourcing: offshore outsourcing and foreign outsourcing.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 1-4: What information systems skills and knowledge are essential for business careers?
99) Describe at least three of the general information skills essential for all business careers.
Answer: General information skills essential for all business careers include (1) understanding
how information systems and technologies can help firms achieve business objectives such as
operational efficiency, developing new products and services, and maintaining customer
intimacy. Also essential is (2) developing skills in the analysis of information in order to help
firms understand and make their data, as well as (3) business analytics and intelligence skills, in
order to be able to analyze the mountains of big data that the online business environment and
Internet of Things produce. (4) All business majors need to be able to work with specialists and
system designers who build and implement information systems. This is necessary to ensure that
the systems that are built actually service business purposes and provide the information and
understanding required by managers and employees. In addition, students need to (5) understand
how information systems can be used to meet business requirements for reporting to government
regulators and the public and how information systems affect the ethical issues in their fields.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 1-4: What information systems skills and knowledge are essential for business careers?
28
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100) What types of jobs are not likely to be outsourced and why?
Answer: Jobs involved with the creation of innovative new products, services, and systems are
rarely outsourced either domestically or globally. The advantage of low-wage countries is their
low wages and ready availability of technical talent, not their keen sense of new products,
services, and technologies for other countries' markets.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 1-4: What information systems skills and knowledge are essential for business careers?
29
Copyright © 2019 Pearson Education, Ltd.
Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 2 Global E-Business and Collaboration
1) Suppliers, customers, invoices and payments, products and services, and ________ are the
five basic components with which businesses must deal.
A) the environment
B) manufacturing and production
C) sales and marketing
D) employees
E) technology
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
2) Producing a bill of materials is a responsibility of the ________ function.
A) finance and accounting
B) human resources
C) manufacturing and production
D) sales and marketing
E) technology
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
3) Identifying potential customers for the businesses' products or services is an activity
associated with the ________ function.
A) finance and accounting
B) human resources
C) manufacturing and production
D) technology
E) sales and marketing
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
1
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4) Which of the following is an interorganizational business process?
A) Hiring an employee
B) Identifying a customer
C) Creating financial statements
D) Ordering raw materials
E) Checking product quality
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
5) Employees that assist with administrative work at all levels of the firm are called:
A) data workers.
B) knowledge workers.
C) operational management.
D) service workers.
E) senior managers.
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
6) The three principal levels of hierarchies within a business organization are:
A) senior management, knowledge workers, and service workers.
B) senior management, middle management, and operational management.
C) senior management, data workers, and operational management.
D) senior management, operational management, and workers.
E) senior management, operational management, and data workers.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
7) Key forces in a business' immediate environment include:
A) regulations.
B) technological innovations.
C) economic conditions.
D) politic conditions.
E) global events.
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
2
Copyright © 2019 Pearson Education, Ltd.
8) Engineers and scientists are examples of:
A) senior management.
B) production workers.
C) knowledge workers.
D) middle management.
E) operational management.
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
9) Which of the following is an example of a key force in a firm's broader, less immediate
environment?
A) Competitors
B) Regulations
C) Suppliers
D) Socioeconomic trends
E) Customers
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
10) Which of the following is not a true statement with respect to business processes?
A) Every business can be seen as a collection of business processes.
B) Analyzing business processes can enable you to achieve a clear understanding of how a
business actually works.
C) The efficiency of a business firm is not related to its business processes.
D) Information systems can automate many steps in business processes that were formerly
performed manually.
E) A business process may involve a unique way in which work, information, and knowledge are
coordinated within an organization.
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
11) Business organizations are hierarchies consisting of three principal levels.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
3
Copyright © 2019 Pearson Education, Ltd.
12) Operational-level manufacturing systems provide transaction-level information that enable
monitoring of the daily activities of a business.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
13) Business processes that impede organizational responsiveness are a source of competitive
strength for a company.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
14) Senior management is responsible for ensuring the financial performance of the firm.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
15) A business is a formal organization created to sell services or products at a profit.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
16) Every business process is tied to one specific functional area.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
17) The efficiency of a business firm depends to a large extent on how well its internal and
interorganizational business processes are designed and coordinated.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
4
Copyright © 2019 Pearson Education, Ltd.
18) What is the connection between organizations, information systems, and business processes?
Answer: Business processes are how work is actually performed, step by step, in an
organization. An organization can be seen as a collection of business processes. Information
systems are used to help the organization execute its business processes. In some cases, an
information system might hinder a business process, making it more complex than necessary, or
it might greatly improve a business process, moving essential information seamlessly between
parts of the organization and different business processes.
Difficulty: 2: Moderate
AACSB: Reflective Thinking; Information Technology; Written and Oral Communication
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
19) Define and give an example of a cross-functional business process within a firm.
Answer: Cross-functional processes are those that require input, cooperation, or coordination
between the major business functions in an organization. For instance, when a salesman takes an
order, the major business functions of planning, production, inventory control, shipping,
accounting, and customer relations will all be involved before the order is completed. What at
first appears to be a simple process, fulfilling an order, turns out to be a very complicated series
of business processes that require the close coordination of major functional groups in a firm.
Difficulty: 1: Easy
AACSB: Analytical Thinking; Written and Oral Communication
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
20) Why do businesses invest in information systems?
Answer: Businesses invest in information systems as a way to cope with and manage their
internal production functions and cope with the demands of key actors in their environments.
Specifically, firms invest in information systems to achieve operational excellence (productivity,
efficiency, agility); to develop new products and services; to attain customer intimacy and
service (continuous marketing, sales, and service; customization and personalization); to improve
decision making (accuracy and speed); to achieve competitive advantage; and to ensure survival.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 2-1: What major features of a business are important for understanding the role of
information systems?
5
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21) A(n) ________ performs and records the daily activities of a firm necessary to conduct
business.
A) executive support system
B) management-level system
C) decision support system
D) transaction processing system
E) business intelligence system
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
22) Which type of system would you use to change a production schedule if a key supplier was
late in delivering goods?
A) ESS
B) CRM system
C) MIS
D) DSS
E) SCM system
Answer: E
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
23) A human resources system that summarizes the total moving, house-hunting, and home
financing costs for employees in all company divisions is an example of which of the following?
A) KMS
B) TPS
C) ESS
D) MIS
E) CRM system
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
6
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24) The term management information systems refers to a specific category of information
systems serving:
A) integrated data processing throughout the firm.
B) transaction process reporting.
C) senior management.
D) middle management functions.
E) knowledge workers.
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
25) Which of the following systems is designed to summarize and report on the company's basic
operations?
A) KMS
B) DSS
C) ESS
D) TPS
E) MIS
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
26) Which of the following systems supports making decisions that are unique, rapidly changing,
and not easily specified in advance?
A) MIS
B) TPS
C) ESS
D) DSS
E) KWM
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
7
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27) Which of the following systems would you use to determine the five suppliers with the worst
record in delivering goods on time?
A) ESS
B) TPS
C) MIS
D) DSS
E) CRM
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
28) Which of the following systems is especially suited to situations in which the procedure for
arriving at a solution may not be fully predefined in advance?
A) MIS
B) TPS
C) DSS
D) KMS
E) CRM
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
29) Which of the following systems would you use to forecast the return on investment if you
used new suppliers with better delivery track records?
A) ESS
B) TPS
C) MIS
D) DSS
E) CRM
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
8
Copyright © 2019 Pearson Education, Ltd.
30) DSS and MIS are also referred to as ________ systems.
A) collaboration
B) business intelligence
C) executive support
D) business model
E) expert
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
31) An ESS is an information system that supports the:
A) long-range planning activities of senior management.
B) knowledge and data workers in an organization.
C) decision-making and administrative activities of middle managers.
D) day-to-day processes of production.
E) management of customer relationships.
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
32) Which of the following systems would you use to determine which trends in your supplier's
industry will affect your firm the most during the next five years?
A) ESS
B) TPS
C) MIS
D) DSS
E) KWM
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
9
Copyright © 2019 Pearson Education, Ltd.
33) Which of the following statements about the National Football League's use of RFID
technology is not true?
A) NFL teams use the data generated by the system to evaluate player and team performance and
to analyze tactics.
B) The system relies on cloud computing.
C) NFL teams use the data generated by the system to analyze fan behavior.
D) Information gathered by the system is used by commentators on live game broadcasts.
E) Microsoft gathers and displays the data using NFL.com.
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
34) Which of the following systems is designed to support organization-wide process
coordination and integration?
A) DSS
B) MIS
C) CRM
D) Enterprise applications
E) ESS
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
35) A(n) ________ collects data from various key business processes and stores the data in a
single comprehensive data repository, usable by many parts of the business.
A) TPS
B) DSS
C) automatic reporting system
D) MIS
E) enterprise system
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
10
Copyright © 2019 Pearson Education, Ltd.
36) What is the most important benefit of an enterprise application?
A) Enabling speed of communicating
B) Enabling business functions and departments to share information
C) Enabling a company to work collaboratively with customers and suppliers
D) Enabling cost-effective, e-business processes
E) Enabling managers to make better decisions
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
37) ________ systems integrate and share information from suppliers, manufacturers,
distributors, and logistics companies.
A) Collaborative distribution
B) Supply chain management
C) Reverse logistics
D) Enterprise planning
E) Digital dashboard
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
38) A ________ provides information to coordinate all of the business processes that deal with
customers in sales, marketing, and service to optimize revenue, customer satisfaction, and
customer retention.
A) TPS
B) MIS
C) ESS
D) CPS
E) CRM system
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
11
Copyright © 2019 Pearson Education, Ltd.
39) Which of the following can typically access a company's intranet?
A) The general public
B) The firm's employees
C) The firm's customers
D) The firm's suppliers
E) The firm's outside contractors
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
40) You manage the Information Systems department at a small startup Internet advertiser. You
need to set up an inexpensive system that allows customers to see real-time statistics, such as
views and click-throughs, about their current display ads. Which type of system will most
efficiently provide a solution?
A) CRM
B) Enterprise system
C) Extranet
D) Intranet
E) KWM
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
41) Which of the following refers to the purchase or sale of goods and services over the Internet?
A) E-commerce
B) E-business
C) CRM
D) MIS
E) SCM
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
12
Copyright © 2019 Pearson Education, Ltd.
42) The use of digital technology and the Internet to execute the major business processes in the
enterprise is called:
A) e-commerce.
B) e-business.
C) enterprise applications.
D) MIS.
E) KWM.
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
43) You work for a highly successful advertiser that is about to expand nationally. Of utmost
importance will be finding a way to store and disseminate its clients' frequently updated branding
and style guides throughout the organization. The guides include multiple image files and text
documents. What system will best serve these needs?
A) A wiki
B) An extranet with KMS capabilities
C) A TPS with KMS capabilities
D) A telepresence system
E) A virtual world
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
13
Copyright © 2019 Pearson Education, Ltd.
44) You have been hired by Inspiration Inc. to help improve its financial performance.
Inspiration Inc. is a business communications consulting firm that services many clients in
different industries throughout the world. The firm provides its clients with customized written
recommendations about how to best use the client's existing resources to improve the client's
internal communications. The company has approximately 100 consultants, all of whom are
located in its central headquarters in Chicago. Which of the following systems would you
recommend to improve Inspiration Inc.'s business processes and improve its financial
performance?
A) Extranet, to enable quick collaboration via the Internet, minimize the time spent
communicating with the client, and minimize the amount of paperwork needed
B) CRM, to maintain easily accessible customer records to minimize the time spent looking for
client data
C) KMS, to minimize redundant work on similar clients
D) Video conferencing system, to improve collaboration
E) MIS, to produce reports on the firm's operations
Answer: A
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Application of Knowledge; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
45) Which of the following types of systems could be used to enable different firms to work
collaboratively on a product?
A) Intranet
B) Extranet
C) KMS
D) CRM
E) DSS
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
46) SCM systems are considered to be a(n) ________ because they automate the flow of
information across company boundaries.
A) KMS
B) enterprise system
C) MIS
D) interorganizational system
E) cross-functional system
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
14
Copyright © 2019 Pearson Education, Ltd.
47) The principal purpose of a TPS is to answer routine questions and track the flow of
transactions through an organization.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
48) A TPS helps managers monitor the firm's relations with the external environment.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
49) A payroll system is a typical example of an MIS.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
50) An MIS typically uses data supplied by a TPS.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
51) An MIS generally is not flexible and has little analytical capability.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
52) Most MIS's use sophisticated mathematical models or statistical techniques.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
15
Copyright © 2019 Pearson Education, Ltd.
53) A DSS often uses information from external sources.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
54) An ESS is designed to serve the middle management of the organization.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
55) An ESS is designed to incorporate data about external events, but it also draws summarized
information from internal MIS and DSS.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
56) An ESS is designed primarily to solve specific problems.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
57) Information supplied by an enterprise system is structured around cross-functional business
processes.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
58) SCM systems are more externally oriented than enterprise systems.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
16
Copyright © 2019 Pearson Education, Ltd.
59) Enterprise systems do not utilize order transaction data.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
60) A KMS and a CRM system are both types of enterprise applications.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
61) Identify the different types of systems used for the different levels of management in a
business.
Answer: The types of information systems used for different levels of management are
transaction processing systems (TPS), management information systems (MIS), decision-support
systems (DSS), and executive support systems (ESS). TPS, such as payroll or order processing,
track the flow of the daily routine transactions that are necessary to conduct business. They are
used by operational managers to manage day-to-day operations. MIS summarize and report on
the company's basic operations using data supplied by TPS. They provide middle managers with
reports on the organization's current performance and are not highly analytical. DSS also support
middle management decisions when these decisions are unique, rapidly changing, and not
specified easily in advance. They use advanced analytical models and data analysis capabilities
and often draw on information from external as well as internal sources. ESS support senior
management by providing data of greatest importance to senior management decision makers.
ESS provide a generalized computing and communications capacity that can be applied to a
changing array of problems. ESS present graphs and data from many sources through an
interface that is easy for senior managers to use, often a portal.
Difficulty: 1: Easy
AACSB: Information Technology; Written and Oral Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
17
Copyright © 2019 Pearson Education, Ltd.
62) Eternal Friend, a family-owned manufacturer of pet caskets, has grown exponentially over
the last few years. However, they are having difficulty in preparing for future growth. The only
information system used at Eternal Friend is an antiquated accounting system. The company has
one manufacturing plant located in Arkansas, and three warehouses, in Arkansas, Delaware, and
California. The Eternal Friend sales force is national, and Eternal Friend purchases most of its
raw materials from a single overseas supplier. You have been hired to recommend the
information systems Eternal Friend should implement in order to maintain their competitive
edge. However, there is not enough money for a full scale, cross-functional enterprise
application, and you will need to limit the first step to a single management level. What will you
choose, and why?
Answer: A TPS, as this is the basis of business systems and used to keep day-to-day operations
running smoothly. A TPS will help to keep production costs low while maintaining quality, and
can be used for communicating with other possible vendors. The TPS could later be used to feed
MIS and other higher-level systems when they are installed.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
63) Describe at least two benefits of using enterprise systems.
Answer: Enterprise systems integrate the firm's key business processes in sales, production,
finance, logistics, and human resources into a single software system so that information can
flow throughout the organization, improving coordination, efficiency, and decision making.
These systems help create a more uniform organization in which everyone uses similar processes
and information, and measures their work in terms of organization-wide performance standards.
The coordination of the firm's key business processes allows the firm to respond more rapidly to
customer demands.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Written and Oral Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
64) How can a good CRM system increase profits for a company?
Answer: Customer relationship management uses information systems to coordinate all of the
business processes surrounding the firm's interactions with its customers. The systems
consolidate customer information from multiple sources—telephone, email, wireless devices,
traditional sales and marketing systems, and the web—so that the firm can obtain a unified view
of a customer. Understanding the customer allows a firm to increase the effectiveness of their
marketing campaigns.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Written and Oral Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
18
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65) The automotive tire supply company you work for, Tires4U, has noticed that one of its
brands of tires is not selling nearly as well as anticipated at most of its locations. For each of the
four main types of information systems found in a business, identify a query that might help
understand this development. Of the four types of systems, which do you think will be the most
helpful and why?
Answer: You might query operational level TPS to make sure that the product is actually getting
to the stores and being restocked. You could query MIS to see average sales levels according to
geography, location, and other factors to see if there are any specific factors affecting the sales.
You might query ESS to see if the same tires are being sold by competitors and what these prices
are. You might use DSS to see what factors could increase sales. Assuming that the tires are
being properly stocked at the stores, the most important system to query is the MIS for
summaries of sales records to help pinpoint any other factors, sales and marketing to assure that
promotion and pricing is accurate.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
66) What is a digital dashboard, and why are they becoming an increasingly popular tool?
Answer: A digital dashboard displays graphical information and charts of key performance
indicators on a single screen. They are becoming increasingly popular because they provide
comprehensive and accurate information for decision making that helps managers quickly spot
areas that need attention.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
67) How have the technologies associated with e-business impacted government?
Answer: Governments on all levels are using Internet technology to deliver information and
services to citizens, employees, and businesses with which they work. The term e-government
refers to the application of the Internet and networking technologies to enable government and
public sector agencies' relationships with citizens, businesses, and other arms of government
digitally. In addition to improving delivery of government services, e-government can make
government operations more efficient and empower citizens by giving them easier access to
information and the ability to network digitally with other citizens. For example, citizens in some
states can renew their driver's licenses or apply for unemployment benefits online, and the
Internet has become a powerful tool for instantly mobilizing interest groups for political action
and fund-raising.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 2-2: How do systems serve different management groups in a business, and how do systems
that link the enterprise improve organizational performance?
19
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68) From your reading of the chapter-opening case study discussing Sanofi Pasteur's use of
enterprise social networking, which of the following statements best expresses Sanofi Pasteur's
experience?
A) Sanofi Pasteur's primary motivation was to enhance its security.
B) Sanofi Pasteur's primary motivation was to give employees more opportunities to experiment
and innovate on their own.
C) Efforts to implement Yammer were met with significant resistance from employees.
D) Yammer provided Sanofi Pasteur with a single entry point to all the information and tools
employees need for their jobs.
E) Sanofi Pasteur is primarily using Yammer to create an external network to link suppliers,
customers, and others outside the organization.
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
69) Interaction jobs are those jobs which:
A) require close coordination and collaboration.
B) involve knowledge that can't be put into an information system.
C) are performed typically by operational-level employees.
D) require intense levels of interaction with clients.
E) require an emphasis on innovation.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
70) In a business environment, the focus of collaboration is to:
A) accomplish the task at hand.
B) provide a sense of community.
C) foster better communication.
D) prevent miscommunication.
E) increase a firm's profit margin.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
20
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71) Which of the following statements is not true about collaboration in a business setting?
A) Collaboration may be a short-lived activity, lasting just a few minutes.
B) Collaboration is a many-to-many activity as opposed to a one-to-one or one-to-many activity.
C) Meaningful collaboration requires a supportive business firm culture and the right,
decentralized structure.
D) The evidence of the business benefits of collaboration is largely anecdotal.
E) Special types of information systems are available to support collaboration.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
72) Each of the following is required for successful collaboration, except:
A) open culture.
B) strong hierarchy.
C) decentralized structure.
D) breadth of collaboration.
E) appropriate collaboration technology.
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
73) A wiki is a type of collaborative:
A) social network.
B) blog.
C) virtual world.
D) website.
E) MIS.
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
21
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74) Second Life is an example of a(n):
A) virtual world.
B) wiki.
C) social network.
D) mind mapping tool.
E) extranet.
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
75) The goal of social commerce applications is to:
A) connect through personal and business profiles.
B) use social media to connect with customers.
C) share opinions about purchasing products or services.
D) upload and share business documents.
E) harness collective knowledge to generate new ideas.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
76) What analytical framework discussed in the chapter helps understand and evaluate the
benefits and uses of collaboration tools?
A) Cost/use matrix
B) Task/time matrix
C) Space/cost matrix
D) Time/space matrix
E) Time/cost matrix
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
22
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77) Adobe Connect is an example of which of the following types of collaboration tools?
A) Blog
B) Team room
C) Online meeting
D) Group calendar
E) Wiki
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
78) Which of the following Google tools allows people to engage in group video chat?
A) Google Drive
B) Google Docs
C) Google Sites
D) Google Circles
E) Google Hangouts
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
79) Instant messaging, videoconferencing, and shared screens are all examples of ________
collaboration tools.
A) bimodal
B) colocated
C) synchronous
D) spontaneous
E) asynchronous
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
23
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80) ________ technology allows a videoconference participant to give the appearance of being
present at a location other than his or her true physical location.
A) Telepresence
B) Virtual reality
C) Screen sharing
D) Mind mapping
E) Virtual world
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
81) SVF uses which of the following collaboration tools?
A) EMC Documentum eRoom
B) IBM Notes
C) Microsoft SharePoint Online
D) Microsoft Yammer
E) Salesforce Chatter
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
82) As discussed in the chapter case, what is the primary reason why Spacebook failed?
A) It was too expensive to implement.
B) It was designed and developed without taking the organization's culture into consideration.
C) It did not include enough collaboration tools.
D) Its user interface was confusing.
E) It was riddled with technical issues.
Answer: B
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
24
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83) Jive is an example of which of the following?
A) MIS
B) Enterprise social networking tool
C) E-commerce system
D) Intranet
E) Extranet
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
84) Nearly all of the research on the business benefits of collaboration is anecdotal.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
85) The primary goal of social business is to deepen interactions with employees and customers.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge; Interpersonal Relations and Teamwork
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
86) You are consulting on software purchases for a translation agency whose headquarters is in
New Jersey, but which works with translators located globally. Headquarters needs to share
documents with groups of translators working on the same documents, who also need to
communicate with each other, in real time if possible, as many people are working in different
time zones. (1) What is your process for determining the most appropriate collaboration
software? (2) In this particular case, what features will you be looking for?
Answer: (1) The first step is to determine what the challenges facing the company are and to
place these needs in the time/space matrix—does collaboration need to be synchronous or
asynchronous; does it need to be remote or colocated? Once the firm's location in the matrix is
determined, you can look for vendor products that fill these needs and analyze the products' cost,
features, benefits, risks, training, and implementation issues. A selection of the top contenders
can be presented to the company. (2) In this case, we will be looking for products that allow
remote interactions that are both synchronous and asynchronous.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
25
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87) Identify and describe at least four business benefits of collaboration. Which do you feel is the
most important and why?
Answer: Business benefits from collaboration are (1) productivity; (2) quality; (3) innovation;
(4) customer service; and (5) financial performance. Collaboration helps productivity because
people working together on a task can complete the task more quickly. It helps quality because
people working together will be more able to correct each other's mistakes. It helps innovation
because people working in groups come up with more ideas than those working in isolation. It
helps customer service because teams can solve customer complaints more quickly together
rather than working in isolation. And as a result of all of these benefits, collaboration helps
finance, because collaborative firms have superior sales, sales growth, and financial
performance. Student evaluations will vary: for example, the most important of the benefits
might be: innovation, because new products, services, and means of production are at the heart of
being able to outperform your competitors.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Interpersonal Relations and Teamwork; Written and Oral
Communication
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
88) Why are "conversations" relevant to social business?
Answer: Customers, suppliers, employees, managers, and even oversight agencies continually
have conversations about firms, often without the knowledge of the firm or its key actors
(employees and managers). Supporters of social business assert that if firms could tune into these
conversations, they will strengthen their bonds with consumers, suppliers, and employees,
increasing their emotional involvement in the firm.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
26
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89) How does a firm with collaborative business culture and business processes differ from a
"command-and-control" firm?
Answer: In command-and-control organizations, the top leaders determine all the really
important matters and then order lower-level employees to execute senior management plans.
The job of middle management is to pass messages back and forth up and down the hierarchy.
Command-and-control firms require lower-level employees to carry out orders without asking
too many questions, with no responsibility to improve processes, and with no rewards for
teamwork or team performance. If workgroups need help from another work group, that is
something for the bosses to figure out. Employees never communicate horizontally, always
vertically, so management can control the process.
A collaborative business culture and business processes are very different. Senior managers are
responsible for achieving results but rely on teams of employees to achieve and implement the
results. Policies, products, designs, processes, and systems are much more dependent on teams at
all levels of the organization to devise, to create, and to build. Teams are rewarded for their
performance, and individuals are rewarded for their performance in a team. The function of
middle managers is to build the teams, coordinate their work, and monitor their performance.
The business culture and business processes are more social. In a collaborative culture, senior
management establishes collaboration and teamwork as vital to the organization, and it actually
implements collaboration for the senior ranks of the business as well.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 2-3: Why are systems for collaboration and social business so important, and what
technologies do they use?
90) Which of the following is most likely to have direct responsibility for ensuring that his or her
company complies with existing data privacy laws?
A) CPO
B) CKO
C) CIO
D) CIP
E) CSO
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
91) The principal liaison between the information systems groups and the rest of the organization
is a(n):
A) programmer.
B) information systems manager.
C) systems analyst.
D) CIO.
E) CSO.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 2-4: What is the role of the information systems function in a business?
27
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92) A ________ is a senior manager who oversees the use of IT in the firm.
A) CEO
B) CFO
C) CIO
D) CIT
E) CPO
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
93) Development and support services for a firm's business systems are provided by:
A) IT educational services.
B) IT management services.
C) data management services.
D) IT standards services.
E) application software services.
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 2-4: What is the role of the information systems function in a business?
94) Policies that determine which information technology will be used, when, and how, are
provided by:
A) IT educational services.
B) IT management services.
C) application software services.
D) IT standards services.
E) data management services.
Answer: D
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 2-4: What is the role of the information systems function in a business?
95) Which of the following would a CSO not be responsible for?
A) Educating and training users about security
B) Keeping management aware of security threats
C) Maintaining tools chosen to implement security
D) Providing physical security
E) Enforcing the firm's information security policy
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
28
Copyright © 2019 Pearson Education, Ltd.
96) Which of the following would be primarily responsible for enterprise-wide governance and
usage of information to maximize the value of an organization's data?
A) CKO
B) CPO
C) End users
D) CDO
E) CSO
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
97) Which of the following is not a service typically provided by an information systems
department?
A) Telecommunications services
B) Physical facilities management services
C) Data management services
D) Project management services
E) Human resources services
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
98) Systems analysts are the principal liaisons between the information systems group and the
rest of the organization.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 2-4: What is the role of the information systems function in a business?
99) End users are playing an increasing role in the design and development of information
systems.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 2-4: What is the role of the information systems function in a business?
29
Copyright © 2019 Pearson Education, Ltd.
100) The role of the information systems department in a company is solely to support the needs
of other groups as determined by senior managers. Explain why you agree or disagree with this
statement.
Answer: Answers will vary, but should include an understanding of the role this department
plays in creating new products and services and coordinating organizational change. An example
answer is: I disagree with this statement. While a major function of the information systems
department is to install, run, and manage the technology infrastructure, another role that it should
play is to inform the company about new technologies, suggest capabilities the firm could have
based on new or existing technologies, and helping the firm manage business processes and
change.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Written and Oral Communication
LO: 2-4: What is the role of the information systems function in a business?
30
Copyright © 2019 Pearson Education, Ltd.
Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 5 IT Infrastructure: Hardware and Software
1) Software that manages the resources of the computer is called:
A) system software.
B) application software.
C) data management software.
D) network software.
E) web services software.
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
2) Software used to apply the computer to a specific task for an end user is called:
A) system software.
B) application software.
C) data management software.
D) network software.
E) web services software.
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
3) Software that organizes, manages, and processes business data, such as data concerned with
inventory, customers, and vendors, is called:
A) system software.
B) application software.
C) data management software.
D) network software.
E) web services software.
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
4) Which of the following is an example of a legacy system?
A) Transaction processing system running on a mainframe
B) Scalable grid computing system
C) Web services running on a cloud computing platform
D) MDM software
E) Quantum computing system
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
1
Copyright © 2019 Pearson Education, Ltd.
5) A firm's IT infrastructure provides the foundation for supporting all the information systems
in the business.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
6) Today, most system and application software is custom built by in-house programmers.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
7) Systems integration means ensuring the legacy systems work with new elements of the
infrastructure.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
8) System software manages the resources and activities of computers
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-1: What are the components of IT infrastructure?
9) Describe the five major categories of IT infrastructure and provide an example of each.
Answer: The major components of IT infrastructure are computer hardware, computer software,
data management technology, networking and telecommunications technology, and technology
services. Computer hardware consists of technology for computer processing, data storage, input,
and output, such as large mainframes, servers, midrange computers, desktop and laptop
computers, and mobile devices. Computer software includes both system software and
application software. System software, such as the Windows operating system, manages the
resources and activities of the computer. Application software, such as Microsoft Word, applies
the computer to a specific task for an end user, such as processing an order or generating a
mailing list. Data management technology is specialized software to organize the data and make
it available to business users. Networking and telecommunications technology provides data,
voice, and video connectivity to employees, customers, and suppliers. Technology services
includes the people to run and manage the other infrastructure components and to train
employees in how to use these technologies for their work.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-1: What are the components of IT infrastructure?
2
Copyright © 2019 Pearson Education, Ltd.
10) In a ________ computing model, companies use their own infrastructure for essential
computing tasks and adopt public cloud computing for less critical operations or additional
processing during peak business periods.
A) scalable
B) quantum
C) grid
D) hybrid cloud
E) private cloud
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
11) What would be a reason for using a workstation rather than a personal computer?
A) When you need more powerful computational abilities
B) When you need to access a network
C) When you need to serve applications and data to client computers
D) When you need to share resources
E) When you need to connect to a cloud computing platform
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
12) Which of the following types of computers would you use to support a computer network?
A) Server
B) Mainframe
C) Workstation
D) PC
E) Tablet
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
3
Copyright © 2019 Pearson Education, Ltd.
13) Which of the following types of computers are used for weather forecasting on a national or
worldwide scale?
A) Mainframe
B) Server
C) Minicomputer
D) Supercomputer
E) PC
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
14) Connecting geographically remote computers in a single network to create a "virtual
supercomputer" is called:
A) co-location.
B) cloud computing.
C) grid computing.
D) client/server computing.
E) centralized processing.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
15) The use of multiple computers linked by a communications network for processing is called:
A) grid computing.
B) distributed processing.
C) client/server computing.
D) centralized processing.
E) supercomputing.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
4
Copyright © 2019 Pearson Education, Ltd.
16) The business case for using grid computing involves all of the following except:
A) cost savings.
B) centralized maintenance.
C) speed of computation.
D) agility.
E) increased computational power.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
17) Which of the following statements about client/server computing is not true?
A) The client provides the user interface.
B) The bulk of processing occurs on the client.
C) Computing on the Internet is based on the client/server model.
D) The client is normally a desktop or laptop computer.
E) The server provides security, remote access, and user authentication.
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
18) In a multitiered network:
A) the work of the entire network is centralized.
B) the work of the entire network is balanced over several levels of servers.
C) processing is split between clients and servers.
D) processing is handled by multiple, geographically remote clients.
E) users interface with the server rather than the client.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
5
Copyright © 2019 Pearson Education, Ltd.
19) A client computer networked to a server computer, with processing split between the two
types of machines, is called a(n) ________ architecture.
A) service-oriented
B) on-demand
C) multitiered client/server
D) two-tiered client/server
E) grid
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
20) How many transactions per day can the IBM Z13 mainframe process?
A) 2.5 million
B) 25 million
C) 250 million
D) 2.5 billion
E) 25 billion
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
21) Which of the following is a type of optical drive storage?
A) Blu-ray
B) Hard drive
C) USB flash drive
D) Magnetic tape
E) SSD
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
6
Copyright © 2019 Pearson Education, Ltd.
22) In lightweight PCs, smartphones, and tablets, which of the following have replaced hard
drives?
A) CD-ROM
B) RAID
C) SSDs
D) Magnetic tape
E) SANs
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
23) All of the following are traditional storage technologies except:
A) magnetic disks.
B) optical drives.
C) magnetic tape.
D) cloud computing.
E) storage networks.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
24) What type of device gathers data and converts them into electronic form for use by the
computer?
A) Output device
B) Input device
C) Optical storage
D) Magnetic storage
E) SAN
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
7
Copyright © 2019 Pearson Education, Ltd.
25) Which of the following devices collects data directly from the environment for input into a
computer system?
A) Sensor
B) Touch screen
C) Audio input
D) Trackball
E) Digital scanner
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
26) Which of the following is not a type of input device?
A) Digital scanner
B) Flat panel (LCD) display screen
C) Trackball
D) Keyboard
E) Sensor
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
27) Virtualization:
A) allows one operating system to manage several physical machines.
B) has enabled microprocessor manufacturers to reduce the size of transistors to the width of an
atom.
C) can boost server utilization rates to 70% or higher.
D) allows smartphones to run full-fledged operating systems.
E) uses the principles of quantum physics to represent data.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
8
Copyright © 2019 Pearson Education, Ltd.
28) Which of the following statements is not true about cloud computing?
A) It is the fastest-growing form of computing.
B) It removes the concern about data and systems security for businesses.
C) It allows smaller firms to use resources previously unaffordable.
D) It relies on the Internet as the platform for delivering services to users.
E) Charges for cloud resources are based on resources actually used.
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
29) Which of the following is not an essential characteristic of cloud computing?
A) On-demand self-service
B) Rapid elasticity
C) Measured service
D) Open source software
E) Ubiquitous network access
Answer: D
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
30) ________ describes the practices and technologies used to minimize the environmental
effects of manufacturing and managing computing devices.
A) Capacity planning
B) Cloud computing
C) Green computing
D) Utility computing
E) On-demand computing
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
9
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31) The world's data centers use as much energy as the output of ________ nuclear power plants,
which is about ________ percent of all the energy use in the world.
A) 10; 1
B) 20; 2.5
C) 30; 1.5
D) 50; 10
E) 100; 25
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
32) All of the following are techniques being used to make data centers more "green" except:
A) air-cooling.
B) virtualization.
C) use of wind power.
D) use of hydropower.
E) use of backup generators.
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
33) Which of the following is not an example of the consumerization of IT?
A) Google's G Suite
B) BYOD
C) Facebook
D) Gmail
E) Amazon Web Services
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
10
Copyright © 2019 Pearson Education, Ltd.
34) All of the following are examples of wearable computing devices except:
A) smartwatches.
B) smart badges.
C) activity trackers.
D) smart glasses.
E) smartphones.
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
35) As discussed in the chapter case, all of the following are benefits of wearable computing
devices except:
A) providing geolocation information for employees.
B) delivering instant notifications to sales managers.
C) using analytic software for performance metrics.
D) processing customer credit card information.
E) providing access to corporate databases.
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
36) Which of the following is considered to be the fastest-growing form of computing?
A) Wearable computing
B) Green computing
C) Nanocomputing
D) Enterprise computing
E) Cloud computing
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
37) A mainframe is a type of legacy workstation.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
11
Copyright © 2019 Pearson Education, Ltd.
38) Client/server computing is the most widely used form of centralized processing.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
39) Application server software is responsible for locating and managing stored web pages.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
40) Using an online storage service such as Dropbox is a type of virtualization.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
41) In cloud computing, rapid elasticity refers to the ability of computing resources to be quickly
obtained, increased, or decreased to meet demand.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
42) A private cloud is operated for the benefit of a single organization but may be managed by a
third party and located off premises.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
43) Google Suite is an example of SaaS.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
12
Copyright © 2019 Pearson Education, Ltd.
44) Nanotechnology uses individual atoms and molecules to create computer chips and other
devices that are thousands of times smaller than current technologies permit.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
45) A SaaS provider maintains a large web server, or series of servers, and provides fee-paying
subscribers with space to maintain their websites.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
46) In client/server computing, the server provides users access to system resources.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
47) Desktop PCs, laptops, and smartphones are the primary interface for accessing the Internet.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
48) An international ad hoc group of climatologists and oceanographers needs to set up a system
to analyze massive amounts of data on ocean temperatures, collected hourly by hundreds of ships
worldwide. What types of hardware might they need for storage and processing? What
techniques might they use to make their research more efficient and lower costs?
Answer: To store their data they will need a SAN. To process their data, they will need a
supercomputer or grid computing. To lower costs, they could look at on-demand or utility
computing, as well as multicore processors and virtualization.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
13
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49) You are starting a small market research company with a single business partner, and are
planning the hardware and software needs for the two of you. You realize that you will need to
make daily backups of your data. What choices do you have as backup media, and what will you
choose? Why?
Answer: Storage options are: magnetic disks or hard drives, USB flash drives, CD-ROM or CDR-W, DVDs, Magnetic tape, SAN. Student answers will vary as to their choice of backup media.
An example answer is: I would probably choose an online backup service or a SAN, because you
can automatically back up your data, or an external or separate hard drive so that you do not have
to keep inserting and removing CDs or DVDs.
Difficulty: 1: Easy
AACSB: Information Technology; Written and Oral Communication
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
50) List and describe the major trends in computer hardware. Which of these do you think will
create the biggest changes in business information systems, and why?
Answer: The major trends in hardware are: the mobile digital platform, consumerization of IT
and BYOD, nanotechnology and quantum computing, virtualization, cloud computing, green
computing, and high performance and power-saving processors.
In the mobile digital platform trend, business computing is increasingly moving to smaller,
mobile devices such as smartphones, and tablet computers, and netbooks.
The consumerization of IT describes the phenomenon in which new information technology first
emerges in the consumer market and then spreads to business organizations. One aspect of this is
BYOD, or bring your own device, which describes the use of personal mobile devices for work.
Nanotechnology uses individual atoms and molecules to create computer chips and other devices
that are thousands of times smaller than current technologies permit.
In quantum computing, data is processed using principles of quantum physics rather than binary
digits or bits, making processing speeds millions of times faster than today.
Virtualization is the process of presenting a set of computing resources (such as computing
power or data storage) so that they can all be accessed in ways that are not restricted by physical
configuration or geographic location. Server virtualization enables companies to run more than
one operating system at the same time on a single machine.
In cloud computing, firms and individuals obtain computing resources and software applications
over the Internet ("the cloud").
In green computing, companies utilize practices for manufacturing, deploying, and disposing of
technology assets that minimize waste and pollution.
The development and use of high performance and power-saving microprocessors is an
additional method of increasing computational power without increasing or with reducing the
power and cooling requirements of computers.
Student opinions regarding the effects of the trends will vary. An example answer is: I think
mobile computing will create the biggest changes, because this means that the amount of
information and types of information being used in business, as well as the locations and hours
of business, will increase drastically.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
14
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51) You are an IT consultant advising a building inspection company that conducts home
inspections throughout your state. The company wishes to switch to primarily mobile computing,
so that inspectors can finalize reports without having to return to the office, but they are not sure
how to go about this. What will be your advice?
Answer: An example answer is: To support the use of multiple mobile devices, including
employee devices, the company will need to configure its networks to receive connections from
these devices, and create an inventory of all mobile devices authorized for access. They will also
need to track what company information is being stored on these devices. If the information
stored on employee's personal devices is highly confidential, they may want to consider the
additional expense of purchasing work-only mobile devices. I would also ask the company what
types of applications would be used in order to determine if tablet computers, netbooks, or
smartphones will be best, as the operating systems for these devices differ. They may also want
to consider mobile device management software to monitor and manage their mobile devices. It
is probably best to sit down with the company and review the home inspection workflow and
data needs in detail and determine how mobile computing would be employed most efficiently.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
52) What are the essential characteristics of cloud computing?
Answer: As defined by the U.S. National Institute of Standards and Technology, cloud
computing is characterized by on-demand self-service, ubiquitous network access, locationindependent resource pooling, rapid elasticity, and measured service. On-demand self-service
means that consumers can use server time and network storage as they need it on their own.
Ubiquitous network refers to the ability to access cloud resources across all devices and
platforms, including mobile. Location independent resource pooling describes the ability to
allocate resources to any part of the world without a dip in service quality. Rapid elasticity is the
capacity for resources to be increased or decreased as needed to meet demand. Lastly, measured
service refers to the payment technique whereby users are charged based on the resources they
use, as opposed to monthly or yearly rates.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 5-2: What are the major computer hardware, data storage, input, and output technologies
used in business and the major hardware trends?
15
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53) Which of the following is an interactive, multiuser operating system developed by Bell
Laboratories in 1969 to be highly supportive of communications and networking?
A) UNIX
B) Linux
C) OS X
D) COBOL
E) Chrome
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
54) Linux is:
A) primarily concerned with the tasks of end users.
B) designed for specific machines and specific microprocessors.
C) an example of open source software.
D) especially useful for processing numeric data.
E) the operating system for the Macintosh computer.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
55) Linux plays a major role in supporting business information systems, and has garnered about
________ of the U.S. server market.
A) 10 percent
B) 25 percent
C) 35 percent
D) 50 percent
E) 80 percent
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
16
Copyright © 2019 Pearson Education, Ltd.
56) Which of the following is a visual programming tool and environment for creating
applications that run on Microsoft Windows operating systems?
A) Java
B) C++
C) XML
D) Visual Basic
E) COBOL
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
57) The toy manufacturer you work for wants to exchange data with a chain of toy stores in order
to improve its distribution and speed to market. The toy stores use different software than your
firm. Which of the following tools or technologies presents the best solution?
A) Mashups
B) Extranet
C) Web services
D) Cloud computing
E) Intranet
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
58) The National Institute of Standards (NIST) defines cloud computing as having all of the
following characteristics except:
A) measured service.
B) ubiquitous network access.
C) collaboration service.
D) rapid elasticity.
E) on-demand self-service.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
17
Copyright © 2019 Pearson Education, Ltd.
59) Microsoft Word is an example of:
A) open source software.
B) word processing software.
C) software productivity suite.
D) data management software.
E) presentation graphics software.
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
60) Which of the following statements about Linux is not true?
A) Linux is a UNIX-like operating system.
B) Linux plays a major role in running web servers and local area networks.
C) Linux is the primary OS used in quantum computing.
D) Linux is a robust alternative to Windows operating systems.
E) Linux is an example of open source software.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
61) Microsoft Excel is an example of:
A) data management software.
B) spreadsheet software.
C) presentation graphics.
D) word processing software.
E) presentation graphics software.
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
18
Copyright © 2019 Pearson Education, Ltd.
62) Which type of software provides more control over text and graphic placement in the layout
of a page than word processing software?
A) Desktop publishing software
B) Spreadsheet software
C) Graphics software
D) Presentation software
E) Data management software
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
63) ________ refers to the ability of a system to expand to serve a number of users without
breaking down.
A) Capacity planning
B) Management future planning
C) Scalability
D) Guaranteed levels of service
E) Service level agreements
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
64) Running a Java program on a computer requires:
A) a Java Virtual Machine to be installed on the computer.
B) a Java Virtual Machine to be installed on the server hosting the Java applet.
C) an applet to be downloaded to the user's computer.
D) no extra or specialized software, as Java is platform-independent.
E) an Intel processor and the Windows operating system.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
19
Copyright © 2019 Pearson Education, Ltd.
65) What is the foundation technology for web services?
A) HTML
B) XML
C) SOAP
D) UDDI
E) Java
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
66) A(n) ________ is a set of self-contained services that communicate with each other to create
a working software application.
A) web service
B) hybrid cloud
C) SOA
D) ERP
E) mashup
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
67) ZipRealty, which combines Google Maps with real estate data, is an example of:
A) cloud computing.
B) SOA.
C) a widget.
D) a mashup.
E) a web service.
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
20
Copyright © 2019 Pearson Education, Ltd.
68) Software applications that combine different components of online software applications are
referred to as:
A) integrated software.
B) widgets.
C) mashups.
D) grid computing.
E) web services.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
69) Which of the following software tools would you use to prepare a break-even analysis?
A) Word processing
B) Spreadsheet
C) Desktop publishing
D) Personal information management
E) Presentation graphics
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
70) Which of the following is an open-source operating system designed for mobile devices?
A) iOS
B) OS X
C) Chrome
D) Android
E) Apache HTTP
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
21
Copyright © 2019 Pearson Education, Ltd.
71) ________ is an operating system-independent, processor-independent, object-oriented
programming language that has become a leading interactive programming environment for the
web.
A) XML
B) SOA
C) HTML
D) Java
E) COBOL
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
72) ________ provides users with free access to its program code.
A) An app
B) Open source software
C) Cloud-based software
D) A web service
E) Office software
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
73) The ability of a person booking a flight on Southwest.com's website to reserve a car from
Dollar Rent-A-Car without having to leave the airline's website is an example of the usage by
Dollar Rent-A-Car and Southwest Airlines of which of the following?
A) Cloud computing
B) Web services
C) Nanotechnology
D) SaaS
E) PaaS
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
74) HTML specifies how text, graphics, video, and sound are placed on a document.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
22
Copyright © 2019 Pearson Education, Ltd.
75) HTML5 is the latest evolution of HTML, and is designed to make it much easier to embed
third-party add-ons in web pages.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
76) Web services can exchange information between two different systems regardless of the
operating system or programming languages on which the systems are based.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
77) XML is limited to describing how data should be presented in the form of web pages, while
HTML can perform presentation, communication, and storage of data.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
78) You are starting an Internet marketing and data mining company. What types of software can
you anticipate needing, and what will these types of software be used for?
Answer: I anticipate needing:
• Operating system software for computers to run.
• Word processing software for communications.
• Spreadsheet software for modeling data.
• Data management software to combine data downloaded/mined from different sources.
• Presentation graphics and desktop publishing software for marketing reports.
• Email, web-browsers for daily communication and research.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
23
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79) Identify and describe some of the current trends in contemporary software platforms.
Answer: Current trends in software include open source software, cloud-based software services
and tools, such as mashups and apps. One of the most influential software trends is the
movement towards open source software. Open source software is developed by a community of
programmers around the world, who make their programs available to users under one of several
different licensing schemes. In cloud-based software, users access software tools and services
over the Internet, as in the various Google Apps. Mashups combine the capabilities of two or
more online applications to create a kind of hybrid that provides more customer value than the
original sources alone. Apps are small pieces of software that run on the Internet, on your
computer, mobile, or tablet, and are usually downloaded from the Internet.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
80) Identify and describe the leading PC and server operating systems.
Answer: The five most widely used operating systems are Windows 10, Windows Server,
UNIX, Linux, and OS X. Windows 10 is the traditional Windows client operating system and is
now used on both mobile devices and traditional PCs. Windows Server is used for network
servers as well as workstations and PCs, and supports networking tasks. UNIX is used for PCs
and network servers and was developed in the late 1960s to support communications and
networking across large systems. UNIX is highly customizable. Linux is an open source
variation of UNIX which has become popular as a low-cost alternative to UNIX as well as
Windows. Linux powers as much as 35 percent of web servers worldwide. OS X is Apple's
operating system. The iOS operating system for mobile devices like the iPhone is derived from
OS X.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 5-3: What are the major types of computer software used in business and the major
software trends?
81) Which of the following refers to the ability of a computer, product, or system to expand to
serve a larger number of users without breaking down?
A) Modifiability
B) Scalability
C) Expandability
D) Disintermediation
E) SLA
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
24
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82) To analyze the direct and indirect costs and determine the actual cost of specific technology
implementations, you would use a:
A) total cost of ownership model.
B) return on investment model.
C) break-even point.
D) cost benefit analysis.
E) capacity plan.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 5-4: What are the principal issues in managing hardware and software technology?
83) Translating software to different languages is commonly referred to as:
A) software localization.
B) scaling.
C) service-oriented architecture.
D) outsourcing.
E) open sourcing.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
84) In order to manage their relationship with an outsourcer or technology service provider,
firms need a contract that includes a(n):
A) TCO.
B) SOA.
C) SLA.
D) API.
E) capacity plan.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 5-4: What are the principal issues in managing hardware and software technology?
85) In co-location, a firm:
A) purchases and owns its web server but locates the server in the physical facility of a hosting
service.
B) contracts with an external vendor to run its computer center and networks.
C) off-loads peak demand for computing power to remote, large-scale data centers.
D) utilizes an external, distributed computing grid.
E) uses only open source software to operate its computer systems.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
25
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86) You use ________ to predict when a computer hardware system becomes saturated.
A) capacity planning
B) virtualization
C) localization
D) measured service
E) SLAs
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
87) An analyst asked to perform capacity planning for a system would need to take into account
all of the following factors except:
A) the maximum number of users a system can accommodate at one time.
B) the minimum response time for processing business transactions.
C) the impact of future software applications.
D) the purchase price of new computer hardware equipment.
E) the volume of transactions.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 5-4: What are the principal issues in managing hardware and software technology?
88) An analyst asked to perform a TCO analysis for a system would need to take into account all
of the following factors except:
A) the minimum response time for processing business transactions.
B) lost productivity if hardware or software failures cause the system to be unavailable for
processing and user tasks.
C) real estate and utility costs for housing and providing power for the technology.
D) the purchase or license of software for each user.
E) the cost to provide training to information systems specialists and end users.
Answer: A
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 5-4: What are the principal issues in managing hardware and software technology?
89) The total cost of ownership refers to the direct costs of owning hardware and software.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
26
Copyright © 2019 Pearson Education, Ltd.
90) A service level agreement specifies the nature and level of services provided by service
providers.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
91) Allowing departments to make their own software and hardware purchases increases
efficiency and minimizes the need for centralized support.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
92) Total cost of ownership components include costs for downtime, training, and support.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
93) One of the main benefits of moving to mobile business computing platforms is the
dramatically lower costs of hardware.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
94) Software localization refers to the entire process of converting software to operate in a
second language.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 5-4: What are the principal issues in managing hardware and software technology?
95) What is scalability? Why is it essential to the success of the modern business firm?
Answer: Scalability is the ability of the computer, product, or system to expand to serve a larger
number of users without breaking down. It is important because as firms grow, they can quickly
outgrow their infrastructure. Any modern company must be able to make plans for the future,
even though that future may be different than what was expected. Computer equipment is
expensive, though dropping in price, and budgets must be planned to allow for new infrastructure
and IT support.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
27
Copyright © 2019 Pearson Education, Ltd.
96) A small design agency you are a financial consultant for will be creating client websites and
wants to purchase a web server so they can host the sites themselves. How will you advise them
on this purchase?
Answer: They should understand the concept or model of total cost of ownership: the costs will
go beyond the cost of the server, but they will also need to purchase the server software, along
with any application software they will be using. They will also need someone in their IT
department to manage and maintain the computers. They will also incur facilities costs for
running the computer. They need to have a backup plan should the server fail. The design agency
will need to add up all the potential costs and risks. Additionally, they need to prepare for the
possibility they may need more servers. Will they eventually have to run and maintain their own
server farm? What about scalability? What if one of their clients' sites is more popular than
anticipated and the server has difficulty handling the load? How quickly can they add servers or
processing power? The company should look at co-location, web hosting services, and service
providers to see if their needs will be better met this way.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
97) You have been given the task of creating localized versions of your company's software for
overseas branches. What are your chief concerns?
Answer: The software will have to be built in a local language interface. Menu bars, commands,
error messages, reports, queries, online data entry forms, and system documentation may need to
be translated into all the languages of the countries where the system will be used. To be truly
useful for enhancing productivity of a global workforce, the software interfaces must be easily
understood and mastered quickly. The entire process of converting software to operate in a
second language is called software localization. Global systems must also consider differences in
local cultures and business processes. Cross-functional systems such as enterprise and supply
chain management systems are not always compatible with differences in languages, cultural
heritages, and business processes in other countries. In a global systems environment, all of these
factors add to the TCO and will influence decisions about whether to outsource or use
technology service providers.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
98) Define outsourcing and explain some of the computing tasks that are well suited to
outsourcing.
Answer: Outsourcing is the shift of IT infrastructure and systems development to external
vendors. This is a good option for companies without the resources or technical capability to
perform certain computing tasks. Tasks well suited to outsourcing include website hosting, web
design, development of custom software, and software maintenance. More basic tasks such as
data entry and call center operation are often outsourced as well. Outsourcing often requires
firms to enter into a service level agreement (SLA) that defines the specific responsibilities of the
service provider.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
28
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99) What are the components that must be considered in a TCO analysis?
Answer: TCO cost components include hardware acquisition, which includes the purchase price
of computer hardware equipment, including computers, terminals, storage, and printers; software
acquisition, which includes the purchase or license of software for each user; installation, which
includes the cost to install computers and software; training, which includes the cost to provide
training to information systems specialists and end users; support, which includes the cost to
provide ongoing technical support; maintenance, which includes the cost to upgrade hardware
and software; infrastructure, which includes the cost to acquire, maintain, and support related
infrastructure, such as networks and specialized equipment; downtime, which includes the cost
of lost productivity if hardware or software failures cause the system to be unavailable; and
space and energy, such as real estate and utility costs.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
100) What are some of the challenges companies face in managing the mobile platform?
Answer: Today, employees want to be able to use a variety of personally owned mobile devices,
including the iPad, iPhone, and Android handhelds, to access corporate systems such as email,
databases, and applications. Gains in productivity from equipping employees with mobile
computing devices must be balanced against increased costs from integrating these devices into
the firm's IT infrastructure and providing technical support. For personal mobile devices to
access company information, the company's networks must be configured to receive connections
from that device. Firms need an efficient inventory management system that keeps track of
which devices employees are using, where each device is, and what software is installed on it.
They also need to know what pieces of corporate data are on those personal devices, and this is
not always easy to determine. It is more difficult to protect the company's network and data when
employees access them from their privately owned devices. If a device is stolen or compromised,
companies need to ensure that sensitive or confidential company information isn't exposed.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 5-4: What are the principal issues in managing hardware and software technology?
29
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Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 6 Foundations of Business Intelligence: Databases and Information Management
1) From your reading of the chapter-opening case study, the Charlotte Hornets implemented a
data warehouse in order to solve which of the following problems?
A) Online ticket sales were falling.
B) There were too many sources of data.
C) The entities and attributes of customer records were poorly organized.
D) There was too much unorganized customer data for decision makers to digest.
E) The team's computer hardware was outdated.
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 6-1: What is a database and how does a relational database organize data?
2) In a business relational database, tables contain:
A) one table for each entity.
B) relations among entities.
C) bytes.
D) three-dimensional relations.
E) links to other tables.
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 6-1: What is a database and how does a relational database organize data?
3) Which of the following best illustrates the relationship between entities and attributes?
A) The entity CUSTOMER with the attribute PRODUCT
B) The entity CUSTOMER with the attribute ADDRESS
C) The entity PRODUCT with the attribute PURCHASE
D) The entity PRODUCT with the attribute CUSTOMER
E) The entity ADDRESS with the attribute CUSTOMER
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 6-1: What is a database and how does a relational database organize data?
1
Copyright © 2019 Pearson Education, Ltd.
4) Which of the following is the type of logical database model that treats data as if they were
stored in two-dimensional tables?
A) Two-tiered DBMS
B) Pre-digital DBMS
C) Open source DBMS
D) Hierarchical DBMS
E) Relational DBMS
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
5) What are the relationships that the relational database is named for?
A) Relationships between rows and columns
B) Relationships between entities
C) Relationships between fields and records
D) Relationships between databases
E) Relationships between attributes
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
6) A characteristic or quality describing an entity is called a(n):
A) field.
B) tuple.
C) key field.
D) attribute.
E) table.
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
7) The most basic business database is comprised of:
A) three tables: for suppliers, parts, and sales.
B) four tables: for customers, suppliers, parts, and sales.
C) four tables: for customers, suppliers, sales, and employees.
D) five tables: for customers, employees, suppliers, parts, and sales.
E) attributes instead of tables.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 6-1: What is a database and how does a relational database organize data?
2
Copyright © 2019 Pearson Education, Ltd.
8) In a table for customers, the information about a single customer would reside in a single:
A) field.
B) entity.
C) column.
D) table.
E) row.
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
9) In a relational database, a record is also called a(n):
A) tuple.
B) key field.
C) entity.
D) field.
E) table.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
10) A field identified in a table as holding the unique identifier of the table's records is called the:
A) primary key.
B) key field.
C) primary field.
D) foreign key.
E) identifying field.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
11) A field identified in a record as holding the unique identifier for that record is called the:
A) primary key.
B) key field.
C) primary field.
D) foreign key.
E) identifying field.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
3
Copyright © 2019 Pearson Education, Ltd.
12) A schematic of the entire database that describes the relationships in a database is called a(n):
A) data dictionary.
B) intersection relationship diagram.
C) field key diagram.
D) data definition diagram.
E) entity-relationship diagram.
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
13) A one-to-one relationship between two entities is symbolized in a diagram by a line that
ends:
A) in two short marks.
B) in one short mark.
C) with a crow's foot.
D) with a crow's foot topped by a short mark.
E) with a crow's foot topped by two short marks.
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
14) A one-to-many relationship between two entities is symbolized in a diagram by a line that
ends:
A) in two short marks.
B) in one short mark.
C) with a crow's foot.
D) with a crow's foot preceded by a short mark.
E) in three short marks.
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
15) A table that links two tables that have a many-to-many relationship is often called a(n):
A) derived table.
B) intersection relation.
C) foreign table.
D) entity-relationship table.
E) derived relation.
Answer: B
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-1: What is a database and how does a relational database organize data?
4
Copyright © 2019 Pearson Education, Ltd.
16) The process of streamlining data to minimize redundancy and awkward many-to-many
relationships is called:
A) normalization.
B) data scrubbing.
C) data cleansing.
D) data administration.
E) data management.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
17) Which of the following best describes the importance of creating an accurate data model for
your business's database?
A) It is not essential, as the data model itself is modified by the database continuously.
B) It is critical, as without one, your data may be inaccurate, incomplete, or difficult to retrieve.
C) It is essential, as table relationships cannot be created without an accurate data model.
D) It is somewhat important, as the type of data model will define what kinds of data will be
stored.
E) It is unnecessary, as a well-designed database should not require one.
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
18) You are working in the IT department of a small paper supply company and planning a new
database that monitors employee benefits and productivity. What would be the relationship you
need to establish between Employee_ID in the Employee table and Parking_spot_number in the
Perks table?
A) One-to-many
B) One-to-one
C) Many-to-many
D) Many-to-one
E) One-to-all
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
5
Copyright © 2019 Pearson Education, Ltd.
19) As described in the chapter case, the Charlotte Hornets used a ________ to consolidate fan
data from multiple sources.
A) database management system
B) relational database
C) data warehouse
D) data model
E) fan management system
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
20) The smallest unit of data a computer can handle is called a:
A) file.
B) record.
C) field.
D) byte.
E) bit.
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
21) A grouping of characters into a word, a group of words, or a complete number is called a
tuple
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
22) Every record in a file must contain at least one key field.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
23) A foreign key is a field that links to a separate table.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-1: What is a database and how does a relational database organize data?
6
Copyright © 2019 Pearson Education, Ltd.
24) A small publishing company that you work for would like to develop a database that keeps
track of the contracts that authors and publishers sign before starting a book. What fields do you
anticipate needing for this database? Identify at least seven fields. Which of these fields might be
in use in other databases within the firm?
Answer: Author first name, author last name, author address, agent name, agent address, title of
book, book ISBN, date of contract, amount of money, payment schedule, date contract ends.
Other databases might be an author database (author names, address, and agent details), a book
title database (title and ISBN of book), and financial database (payments made).
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 6-1: What is a database and how does a relational database organize data?
25) What types of relationships are possible in a relational database? Describe and give an
example of each.
Answer: There are three types of relationships: one-to-one, one-to-many, and many-to-many. A
one-to-one relationship occurs when each record in one table has only one related record in a
second table. An example might be a table of salespeople and a separate table of company cars.
Each salesperson can only have one car, or be related to the one car in the database. A one-tomany relationship occurs when a record in one table has many related records in a second table.
An example might be a table of salespeople and clients. Each salesperson may have several
clients. A many-to-many relationship occurs when records in one table have many related
records in a second table, and the records in the second table have many related records in the
first table. An example might be a clients table and a products table. Clients may buy more than
one product, and products are sold to more than one client.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 6-1: What is a database and how does a relational database organize data?
26) The small publishing company you work for wants to create a new database for storing
information about all of their author contracts. What difficulties do you anticipate?
Answer: Data accuracy when the new data is input, establishing a good data model, determining
which data is important and anticipating what the possible uses for the data will be, beyond
looking up contract information, technical difficulties linking this system to existing systems,
new business processes for data input and handling, and contracts management, determining how
end users will use the data, making data definitions consistent with other databases, what
methods to use to cleanse the data.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 6-1: What is a database and how does a relational database organize data?
7
Copyright © 2019 Pearson Education, Ltd.
27) A DBMS makes the:
A) relational database available for different analytical views.
B) logical database available for different analytical views.
C) physical database available for different relational views.
D) relational database available for different physical views.
E) physical database available for different logical views.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
28) The logical view of a database:
A) shows how data are organized and structured on the storage media.
B) presents an entry screen to the user.
C) allows the creation of supplementary reports.
D) presents data as they would be perceived by end users.
E) shows the relationships between entities and attributes.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
29) Which of the following allows users to add, change, delete, or retrieve data in a database?
A) Attribute generation
B) Report generation tools
C) Data dictionary
D) Query wizard tool
E) Data manipulation language
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
30) In a relational database, the three basic operations used to develop useful sets of data are:
A) select, project, and where.
B) select, join, and where.
C) select, project, and join.
D) select, from, and join.
E) who, what, and where.
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
8
Copyright © 2019 Pearson Education, Ltd.
31) The select operation:
A) combines relational tables to provide the user with more information than is otherwise
available.
B) creates a subset consisting of columns in a table.
C) identifies the table from which the columns will be selected.
D) creates a subset consisting of all records in the file that meet stated criteria.
E) specifies the content of the database.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
32) The project operation:
A) combines relational tables to provide the user with more information than is otherwise
available.
B) creates a subset consisting of columns in a table.
C) organizes elements into segments.
D) identifies the table from which the columns will be selected.
E) stores definitions of data elements.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
33) Which of the following is an automated or manual file that stores information about data
elements and data characteristics such as usage, physical representation, ownership,
authorization, and security?
A) Referential integrity module
B) Data definition diagram
C) Entity-relationship diagram
D) Relationship dictionary
E) Data dictionary
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
34) Which of the following is the most prominent data manipulation language today?
A) Access
B) DB2
C) SQL
D) Crystal Reports
E) Hadoop
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
9
Copyright © 2019 Pearson Education, Ltd.
35) Non-relational databases:
A) store information in an unstructured format.
B) use rows and columns to organize data.
C) are used to store structured and unstructured data.
D) are used to store low volumes of transactional data.
E) use database-mapping to normalize relations.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
36) DBMS typically include report-generating tools in order to:
A) retrieve and display data.
B) display data in tables.
C) display data in graphs.
D) perform predictive analysis.
E) display data in an easier-to-read-format.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
37) Both Oracle and Microsoft Access use SQL to retrieve information from a database.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
38) DBMS simplify how end users work with databases by separating the logical and physical
views of the data.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
39) Microsoft Access is a database management system for large mainframes computers.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
40) A logical view of data shows data as it is organized on the storage media.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
10
Copyright © 2019 Pearson Education, Ltd.
41) The select operation in a relational database joins records from different tables.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
42) Identify and describe the three basic operations used to extract useful sets of data from a
relational database?
Answer: The select operation creates a subset consisting of all records (rows) in the table that
meet stated criteria. The join operation combines relational tables to provide the user with more
information than is available in individual tables. The project operation creates a subset
consisting of columns in a table, permitting the user to create new tables that contain only the
information required.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 6-2: What are the principles of a database management system?
43) Describe the process of querying and reporting in a database using DBMS.
Answer: DBMS include tools for accessing and manipulating information in databases. A data
manipulation language is used to handle data in the database—adding, changing, deleting, and
retrieving data. Structured Query Language (SQL) is the most common data manipulation
language in use today. DBMS also include the ability to generate reports to display information
in a more accessible format using a report generator.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-2: What are the principles of a database management system?
44) What are some of the benefits of using the cloud as a database platform?
Answer: Cloud-based data management services are ideal for smaller to medium-sized
businesses looking to establish database capabilities without paying for expensive in-house
database products. Companies can use public cloud-based services or they can use a private
cloud to share hardware and software between users, reducing the number of servers, DBMS,
and storage devices required.
Difficulty: 1: Easy
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-2: What are the principles of a database management system?
11
Copyright © 2019 Pearson Education, Ltd.
45) MongoDB and SimpleDB are both examples of:
A) open source databases.
B) SQL databases.
C) NoSQL databases.
D) cloud databases.
E) big data databases.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-2: What are the principles of a database management system?
46) A ________ is a repository for raw unstructured data or structured data that for the most part
have not yet been analyzed.
A) data mart
B) data warehouse
C) dashboard
D) data lake
E) relational DBMS
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
47) In clustering, a data mining tool will find:
A) new groupings within data.
B) related predictions from existing values.
C) several events grouped by time.
D) new associations.
E) forecasts for future events.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
48) Big data refers to any database that:
A) contains more than one petabyte of data.
B) discovers patterns in data.
C) has a large volume and variety of data.
D) includes data from thousands of websites.
E) stores data in rows and columns.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
12
Copyright © 2019 Pearson Education, Ltd.
49) Data mining is more ________ than OLAP.
A) data-focused
B) multidimensional
C) query oriented
D) discovery driven
E) streamlined
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
50) All of the following are tools or technologies for extracting information from unstructured
data sets except:
A) sentiment analysis software.
B) SQL queries.
C) Hadoop.
D) a non-relational DBMS.
E) text mining.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
51) Which of the following database types would be best suited for storing multimedia?
A) SQL DBMS
B) Open source DBMS
C) Non-relational DBMS
D) Cloud-based database
E) NoSQL DBMS.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
13
Copyright © 2019 Pearson Education, Ltd.
52) Pre-configured hardware-software systems that use both relational and non-relational
technology optimized for analyzing large data sets are referred to as:
A) hybrid DBMS.
B) Hadoop.
C) BI.
D) analytic platforms.
E) data marts.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
53) Which of the following statements about data warehouses is not true?
A) They store supply data to be used across the enterprise for management analysis and decision
making.
B) Data warehouse systems provide a range of ad hoc and standardized query tools, analytical
tools, and graphical reporting facilities.
C) They may include data from website transactions.
D) Data warehouse systems provide easy-to-use tools for managers to easily update data.
E) Data warehouses make data available for anyone to access as needed.
Answer: D
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
54) A data mart usually can be constructed more rapidly and at lower cost than a data warehouse
because:
A) it typically focuses on a single subject area or line of business.
B) all the information is historical.
C) it uses a web interface.
D) all of the information belongs to a single company.
E) it is open-source.
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
14
Copyright © 2019 Pearson Education, Ltd.
55) Capabilities and tools to manage and analyze large quantities and different types of data from
multiple sources are collectively known as:
A) DSS.
B) business intelligence infrastructure.
C) OLAP.
D) data mining.
E) in-memory computing.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
56) Which of the following enables users to view the same data in different ways using multiple
dimensions?
A) Hadoop
B) SQL
C) Big data
D) Data mining
E) OLAP
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
57) OLAP is a tool that enables users to:
A) obtain online answers to ad hoc questions in a rapid amount of time.
B) view both logical and physical views of data.
C) quickly diagram data relationships.
D) normalize data.
E) find hidden patterns in large databases.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
15
Copyright © 2019 Pearson Education, Ltd.
58) Data mining is a tool for allowing users to:
A) quickly compare transaction data gathered over many years.
B) perform multidimensional data analysis.
C) obtain online answers to ad hoc questions in a rapid amount of time.
D) summarize massive amounts of data into much smaller, traditional reports.
E) find hidden relationships in data.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
59) In terms of the data relationships found by data mining, associations refers to:
A) events linked over time.
B) patterns that describe a group to which an item belongs.
C) occurrences linked to a single event.
D) undiscovered groupings.
E) classification when no groups have yet been defined.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
60) In terms of the data relationships found by data mining, sequences refers to:
A) events linked over time.
B) patterns that describe a group to which an item belongs.
C) occurrences linked to a single event.
D) undiscovered groupings.
E) classifications when no groups have yet been defined.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
16
Copyright © 2019 Pearson Education, Ltd.
61) Which of the following would you use to find patterns in user interaction data recorded by
web servers?
A) Web usage mining
B) Web server mining
C) Web structure mining
D) Web content mining
E) Web protocol mining
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
62) Which of the following would you use to find out which websites with content related to
database design were the most often linked to by other websites?
A) Web usage mining
B) Web server mining
C) Web structure mining
D) Web content mining
E) Web protocol mining
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
63) Businesses use ________ tools to search and analyze unstructured data sets, such as emails
and memos.
A) Hadoop
B) web mining
C) text mining
D) OLAP
E) DBMS
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
17
Copyright © 2019 Pearson Education, Ltd.
64) Hadoop is a(n):
A) NoSQL database technology that stores both data and procedures acting on the data as
objects.
B) data mining platform designed for storing and analyzing big data produced by web
communications and transactions.
C) open source software framework designed for distributing data-processing over inexpensive
computers.
D) pre-configured hardware-software system designed for analyzing big data.
E) high-speed platform used to analyze large data sets.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
65) A data ________ stores current and historical data of potential interest to decision makers
throughout the company.
A) warehouse
B) mart
C) archive
D) mine
E) center
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
66) A(n) ________ is a dedicated computer in a client/server environment that hosts a DBMS.
A) web server
B) online server
C) database server
D) client server
E) application server
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
18
Copyright © 2019 Pearson Education, Ltd.
67) Which of the following is an example of a company whose business model is based on
access to large databases through the web?
A) Gartner
B) Fortune
C) IBM
D) Microsoft
E) Facebook
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
68) Links pointing to an online document are a sign of:
A) richness or variety of topics covered.
B) popularity.
C) data quality.
D) data usage.
E) marketing.
Answer: B
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
69) Links coming out of an online document are a sign of:
A) richness or variety of topics covered.
B) popularity.
C) data quality.
D) data usage.
E) marketing.
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
70) Text mining is the discovery of useful patterns on the web.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
19
Copyright © 2019 Pearson Education, Ltd.
71) Sentiment analysis is used to identify patterns in blogs and social media conversations to
detect favorable and unfavorable comments.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
72) Hadoop is an open source software framework for processing large quantities of any type of
data, including video and Twitter feeds.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
73) Two key services of Hadoop are HDFS and HBase non-relational database.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
74) A data warehouse is best used for storing unstructured data.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
75) A data warehouse extracts current and historical data from multiple operational systems in an
organization.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
76) OLAP enables users to view data from different perspectives.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
20
Copyright © 2019 Pearson Education, Ltd.
77) OLAP is used to quickly find answers to ad hoc questions.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
78) In-memory computing relies on a computer's main memory for storing data.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
79) Web servers can directly access a firm's back-end databases using HTML.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
80) CGI is a specification for processing data on a web server.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
81) In linking databases to the web, the role of the application server is to host the DBMS.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
21
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82) List and describe three main capabilities or tools of a DBMS.
Answer: A DBMS includes capabilities and tools for organizing, managing, and accessing the
data in the database. The most important are its data definition capability, data dictionary, and
data manipulation language. The data definition capability specifies the structure of the content
of the database. It is used to create database tables and to define the characteristics of the fields
in each table. This information about the database would be documented in a data dictionary. A
data dictionary is an automated or manual file that stores definitions of data elements and their
characteristics. Data dictionaries for large corporate databases may capture additional
information, such as usage; ownership (who in the organization is responsible for maintaining
the data); authorization; security; and the individuals, business functions, programs, and reports
that use each data element. The data manipulation language is a specialized language used to
add, change, delete, and retrieve the data in the database. This language contains commands that
permit end users and programming specialists to extract data from the database to satisfy
information requests and develop applications.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
83) Describe the ways in which database technologies could be used by an office stationery
supply company to achieve low-cost leadership.
Answer: Student answers will vary; an example answer is: Databases could be used to make the
supply chain more efficient and minimize warehousing and transportation costs. You can use
OLAP to better analyze sales forecasts. You can also use sales databases and predictive analysis
to determine what supplies are in demand by which customers, and whether needs are different
in different geographical areas. DSS databases could be used to predict future trends in office
supply needs, to help anticipate demand. You could use text mining to identify service issues or
inefficiencies within the company. Databases could be used to determine the most efficient
methods of transportation and delivery. In addition, you could allow customers to order supplies
through the web and have these orders influence the entire supply chain and minimize
warehousing costs.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
22
Copyright © 2019 Pearson Education, Ltd.
84) Explain what big data refers to. What benefits does it have, and what challenges does it
pose?
Answer: Big data are datasets with volumes so huge that they are beyond the ability of typical
DBMS to capture, store, and analyze. Big data is often characterized by the "3Vs": the extreme
volume of data, the wide variety of data types and sources, and the velocity at which the data
must be processed. Big data doesn't designate any specific quantity but usually refers to data in
the petabyte and exabyte range—in other words, billions to trillions of records, respectively,
from different sources. Big data are produced in much larger quantities and much more rapidly
than traditional data. It is created by the explosion of data coming from the web, such as web
traffic, email, Twitter, and Facebook, as well as information from other electronic and networked
devices such as sensors and meters. Businesses are interested in big data because they contain
more patterns and interesting anomalies than smaller data sets, with the potential to provide new
insights into customer behavior, weather patterns, financial market activity, or other phenomena.
However, to derive business value from these data, organizations need new technologies and
tools capable of managing and analyzing non-traditional data along with their traditional
enterprise data. They also need to know what questions to ask of the data and limitations of big
data. Capturing, storing, and analyzing big data can be expensive, and information from big data
may not necessarily help decision makers.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
85) What are the differences between data mining and OLAP? When would you advise a
company to use OLAP?
Answer: Data mining uncovers hidden relationships and is used when you are trying to discover
data and new relationships, and is used to answer questions such as, are there any product sales
that are related in time to other product sales. In contrast, OLAP is used to analyze multiple
dimensions of data and is used to find answers to complex, but known, questions, such as what
were sales of a product broken down by month and geographical region, and compared to sales
forecasts. I would advise a company to use OLAP when they need to analyze sales in different
areas or for different products to see complex views of data.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
23
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86) What makes data mining an important business tool? What types of information does data
mining produce? In what type of circumstance would you advise a company to use data mining?
Answer: Data mining is one of the data analysis tools that helps users make better business
decisions and is one of the key tools of business intelligence. Data mining allows users to
analyze large amounts of data and find hidden relationships between data that otherwise would
not be discovered. For example, data mining might find that a customer that buys product X is
ten times more likely to buy product Y than other customers.
Data mining finds information such as:
• Associations, or occurrences that are linked to a single event.
• Sequences, or events that are linked over time.
• Classification, or patterns that describe the group to which an item belongs, found by
examining existing items that have been classified and by inferring a set of rules.
• Clusters, or unclassified but related groups.
I would advise a company to use data mining when they are looking for new products and
services, or when they are looking for new marketing techniques or new markets. Data mining
might also be helpful when trying to analyze unanticipated problems with sales whose causes are
difficult to identify.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
87) What are the similarities and differences between a data warehouse and a data mart?
Answer: A data warehouse stores current and historical data of potential interest throughout a
company. Data warehouses gather data from multiple operational systems inside the
organization. Data warehouses make data available, but do not allow that information to be
altered. Data marts are subsets of data warehouses, in which a highly focused portion of an
organization's data is placed in a separate database for specific users. Data marts are
decentralized, whereas data warehouses are enterprise-wide, central locations for data.
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
88) Imagine you are running a growing business with an active presence on social media. How
would you better understand what your customers think about your business using these
platforms?
Answer: Text mining and web mining techniques would help a business in this situation. Using
text mining tools, businesses can analyze transcripts of calls, texts of email messages, blogs, and
social media posts using sentiment analysis, or survey forms, gleaning valuable information
about customer opinions on specific topics. web mining involves similar techniques, but using
web pages and Google search results as the source of data.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-3: What are the principal tools and technologies for accessing information from databases
to improve business performance and decision making?
24
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89) Within a corporate information services department, the task of establishing the physical
database and its logical relations are responsibilities of the ________ function.
A) data management
B) data administration
C) server administration
D) data modeling
E) database administration
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
90) Rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying
information is referred to as:
A) data cleansing.
B) data mining.
C) an information policy.
D) logical database design.
E) a data quality audit.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
91) Detecting and correcting data in a database or file that are incorrect, incomplete, improperly
formatted, or redundant is called:
A) data auditing.
B) defragmentation.
C) data scrubbing.
D) data optimization.
E) data repair.
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
25
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92) A(n) ________ is a structured survey of the accuracy and level of completeness of the data in
an information system.
A) data quality audit
B) systems analysis
C) systems audit
D) data analysis
E) data overview
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
93) Common data quality problems include all of the following except:
A) misspelled names.
B) transposed numbers.
C) incorrect codes.
D) missing codes.
E) Internet connectivity problems.
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
94) A firm's information policy lays out who is responsible for updating and maintaining the
information in a database system.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
95) Redundant data often stems from the use of different codes to identify the same data in a
firm's various information systems.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
96) Data cleansing is the same process as data scrubbing.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
26
Copyright © 2019 Pearson Education, Ltd.
97) An information policy specifies the procedures and rules for defining the structure and
content of corporate databases.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
98) Data administration is a special organizational function that manages the policies and
procedures through which data can be managed as an organizational resource.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
99) List at least two ways that a business's data can become redundant or inconsistent.
Answer: Data redundancy and inconsistency can occur because of (1) employing different
names and descriptions for the same entities or attributes; (2) multiple systems feeding a data
warehouse; (3) incorrect data entry.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
100) Why might you receive multiple pieces of the same piece of mail, or multiple emails
featuring the same promotion?
Answer: These events often occur because of redundant information in a database. If you used
your middle initial one time and not another, it might generate two entries for you, leading to
extra advertising. These types of errors are caused by data input, and are becoming more
frequent as companies migrate to the web and allow individuals to enter their own data into
websites. Organizations must identify and correct this type of error using a data quality audit and
by performing data cleansing.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 6-4: Why are information policy, data administration, and data quality assurance essential
for managing the firm's data resources?
27
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Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 7 Telecommunications, the Internet, and Wireless Technology
1) Which of the following is a device that sends packets of data through different networks
assuring they go to the correct address?
A) Hub
B) Switch
C) Router
D) NIC
E) Modem
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
2) The Internet is based on which three key technologies?
A) TCP/IP, HTML, and HTTP
B) TCP/IP, HTTP, and packet switching
C) Client/server computing, packet switching, and the development of communications standards
for linking networks and computers
D) Client/server computing, packet switching, and HTTP
E) Email, instant messaging, and newsgroups
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
3) Which of the following involves slicing digital messages into parcels, transmitting them along
different communication paths, and reassembling them at their destinations?
A) Multiplexing
B) Packet shifting
C) Packet routing
D) ATM
E) Packet switching
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
1
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4) The telephone system is an example of a ________ network.
A) peer-to-peer
B) wireless
C) packet-switched
D) circuit-switched
E) client/server
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
5) Which of the following is not a characteristic of packet switching?
A) Packets travel independently of each other.
B) Packets are routed through many different paths.
C) Packet switching requires point-to-point circuits.
D) Packets include data for checking transmission errors.
E) Packets are reassembled into the original message when they reach their destinations.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
6) In TCP/IP, IP is responsible for which of the following?
A) Disassembling and reassembling packets during transmission
B) Establishing an Internet connection between two computers
C) Moving packets over the network
D) Sequencing the transfer of packets
E) Breaking messages down into packets
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
2
Copyright © 2019 Pearson Education, Ltd.
7) Which of the following is the best description of a protocol in a telecommunications network
architecture?
A) A device that handles the switching of voice and data in a local area network
B) A standard set of rules and procedures for control of communications in a network
C) A communications service for microcomputer users
D) The main computer in a telecommunications network
E) A pathway through which packets are routed
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
8) What are the four layers of the TCP/IP reference model?
A) Physical, Application, Transport, and Network Interface
B) Physical, Application, Internet, and Network Interface
C) Application, Transport, Internet, and Network Interface
D) Application, Hardware, Internet, and Network Interface
E) Software, Hardware, Network Interface, Internet
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
9) On which of the following protocols is the Internet based?
A) TCP/IP
B) FTP
C) IMAP
D) HTTP
E) DNS
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
3
Copyright © 2019 Pearson Education, Ltd.
10) Client/server computing is a:
A) network that connects sensors to desktop computers.
B) network where centralized mainframe computers serve local devices.
C) centralized model of computing for large corporations.
D) distributed computing model where clients are linked to one another through a network that is
controlled by a network server computer.
E) centralized computing model where local computers are connected to one another by a
network.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
11) Computer networks are based on the same principles as telephone networks.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
12) A NOS must reside on all the local computers in a network.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
13) A hub is a networking device that sends packets of data to all other devices on the network.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
14) In a client/server network, a network server sets the rules of communication for the network.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
4
Copyright © 2019 Pearson Education, Ltd.
15) A computer network consists of at least two computers.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
16) Client/server computing has largely replaced centralized mainframe computing.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
17) Computer networks that use packet switching are much more efficient than telephone
networks that use circuit switching.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
18) Two computers using TCP/IP can communicate even if they are based on different hardware
and software platforms.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
19) In a large company today, you will often find an infrastructure that includes hundreds of
small LANs linked to each other as well as to corporate-wide networks.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
20) TCP/IP was developed during the early 1970s to support efforts to help scientists transmit
data among different types of computers over long distances.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Reflective Thinking
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
5
Copyright © 2019 Pearson Education, Ltd.
21) How does packet switching work?
Answer: Packet switching is a method of slicing digital messages into parcels called packets,
sending the packets along different communication paths as they become available, and then
reassembling the packets once they arrive at their destinations. Packet switching makes much
more efficient use of the communications capacity of a network than did circuit-switching. In
packet-switched networks, messages are first broken down into small fixed bundles of data
called packets. The packets include information for directing the packet to the right address and
for checking transmission errors along with the data. The packets are transmitted over various
communication channels using routers, each packet traveling independently. Packets of data
originating at one source will be routed through many different paths and networks before being
reassembled into the original message when they reach their destinations.
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
22) Identify the layers of the Department of Defense reference model for TCP/IP, and describe
how this model works.
Answer: The application layer enables client application programs to access the other layers and
defines the protocols that applications use to exchange data. One of these application protocols is
the Hypertext Transfer Protocol (HTTP), which is used to transfer Web page files. The transport
layer is responsible for providing the application layer with communication and packet services.
This layer includes TCP and other protocols. The Internet layer is responsible for addressing,
routing, and packaging data packets called IP datagrams. The Internet Protocol is one of the
protocols used in this layer. The network interface layer is responsible for placing packets on and
receiving them from the network medium, which could be any networking technology.
Data sent from one computer to the other passes downward through all four layers, starting with
the sending computer's application layer and passing through the network interface layer. After
the data reach the recipient host computer, they travel up the layers and are reassembled into a
format the receiving computer can use. If the receiving computer finds a damaged packet, it asks
the sending computer to retransmit it. This process is reversed when the receiving computer
responds.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
6
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23) How are modern telephone and computer networks different from what firms used in the
past?
Answer: Modern telephone and computer networks are converging into a single digital network
using shared Internet-based standards and technology. Telecom companies offer full suites of
telecommunication and Internet service. In the past, these two types of networks were distinct—
telephone networks and computer networks performed completely different services and were
not affiliated with one another. Additionally, modern communication networks are much faster
and more cost effective than they were in the past.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 7-1: What are the principal components of telecommunications networks and key
networking technologies?
24) Which signal types are represented by a binary waveform?
A) Laser
B) Optical
C) Digital
D) RFID
E) Analog
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
25) Which of the following is a device that makes possible the translation of digital signals to
analog sound signals used by a computer network?
A) Local area network
B) Modem
C) DSL
D) Twisted wire
E) TCP/IP
Answer: B
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
26) Which type of network is used to connect digital devices within a city or metropolitan area?
A) Wi-Fi
B) LAN
C) WAN
D) MAN
E) SAN
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
7
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27) Which type of network treats all processors equally and allows peripheral devices to be
shared without going to a separate server?
A) MAN
B) Wireless
C) LAN
D) Windows domain network
E) Peer-to-peer
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
28) Which type of network would be most appropriate for a business comprised of three
employees and a manager located in the same office space, whose primary need is to share
documents?
A) MAN
B) Domain-based LAN
C) Peer-to-peer network
D) WAN
E) SAN
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 7-2: What are the different types of networks?
29) A network that spans a college or corporate facility is called a:
A) CAN.
B) MAN.
C) LAN.
D) WAN.
E) WSN.
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
30) A network that covers entire geographical regions is most commonly referred to as a(n):
A) local area network.
B) intranet.
C) peer-to-peer network.
D) wide area network.
E) metropolitan area network.
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
8
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31) Bandwidth is the:
A) number of frequencies that can be broadcast through a medium.
B) number of cycles per second that can be sent through a medium.
C) difference between the highest and lowest frequencies that can be accommodated on a single
channel.
D) total number of bytes that can be sent through a medium per second.
E) geographical distance spanned by a network.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
32) The total amount of digital information that can be transmitted through any
telecommunications medium is measured in:
A) bps.
B) Hertz.
C) baud.
D) gigaflops.
E) RPMs.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
33) A(n) ________ signal is a discrete, binary waveform that transmits data coded into two
discrete states such as 1-bits and 0-bits.
A) modulated
B) broadband
C) T1
D) analog
E) digital
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
34) Coaxial cable is similar to that used for cable television and consists of thickly insulated
copper wire.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
9
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35) Fiber-optic cable is more expensive and harder to install than wireless media.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
36) Bandwidth refers to the range of frequencies that can be transmitted by a telecommunications
channel.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-2: What are the different types of networks?
37) You have been hired by a small new web design firm to set up a network for its single office
location. The network is primarily needed for exchanging files, accessing and managing beta
websites on their web server, and connecting to the Internet. The firm hires many freelancers
who come into the office on an ad-hoc basis and it does not have a lot of money to spend on
infrastructure. What type of network will you recommend?
Answer: Student answers will vary. An example answer is: I would recommend a mixed wired
and wireless network. The wired LAN would connect the web servers and primary workstations
and connect via cable service to the Internet. Freelancers could connect wirelessly via access
points.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-2: What are the different types of networks?
38) What are the two types of signals used to communicate a message in a network and how are
they different? What device converts one type to the other type?
Answer: The two ways to communicate a message in a network are analog signals and digital
signals. An analog signal is represented by a continuous waveform that passes through a
communications medium and is used for voice communication. Examples include the telephone
handset and other types of speakers that generate analog sound. On the other hand, digital signals
are binary waveforms (not continuous) that communicate information as strings of two discrete
states: one bit or zero bits (often depicted as strings of zeroes and ones). Computers use these
types of signals and use modems to convert digital signals to analog signals.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 7-2: What are the different types of networks?
10
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39) What are some of the common types of physical transmission media and what differentiates
them from one another?
Answer: Common types of physical transmission media include twisted pair wire, coaxial cable,
fiber-optic cable, and wireless transmission media. Twisted pair wire consists of strands of
copper wire twisted in pairs for voice and data communications. Coaxial cable consists of thickly
insulated copper wires capable of high-speed data transmission and resistance to interference.
Fiber-optic cable consists of strands of clear glass fiber that transmit data as pulses of light
generated by lasers. Wireless transmission media is based on radio signals and involves satellite
microwave systems and cellular networks.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 7-2: What are the different types of networks?
40) Which of the following is not one of the top five search engines?
A) Facebook
B) Yahoo
C) Microsoft Bing
D) Baidu
E) Google
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
41) Digital subscriber lines:
A) operate over existing telephone lines to carry voice, data, and video.
B) operate over coaxial cable lines to deliver Internet access.
C) are very-high-speed data lines typically leased from long-distance telephone companies.
D) have up to twenty-four 64-Kbps channels.
E) are assigned to every computer on the Internet.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
11
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42) T1 lines:
A) operate over existing telephone lines to carry voice, data, and video.
B) operate over coaxial lines to deliver Internet access.
C) do not provide guaranteed service levels, but simply "best effort."
D) have up to twenty-four 64-Kbps channels.
E) are high-speed, leased data lines providing guaranteed service levels.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
43) What service converts IP addresses into more recognizable alphanumeric names?
A) HTML
B) FTP
C) IP
D) HTTP
E) DNS
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
44) The domain .gov is a(n):
A) Internet root domain.
B) top-level domain.
C) host domain.
D) network domain.
E) third level domain.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
12
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45) In the domain name "http://books.azimuth-interactive.com", which element is the secondlevel domain?
A) books
B) azimuth-interactive.com
C) com
D) none; there is no second-level domain in this name
E) books.azimuth-interactive
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
46) Which organization manages the domain name system of the Internet?
A) none (no one "owns" the Internet)
B) W3C
C) ICANN
D) The Department of Commerce (U.S.)
E) IAB
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
47) IPv6 has been developed in order to:
A) update the packet transmission protocols for higher bandwidth.
B) create more IP addresses.
C) allow for different levels of service.
D) support Internet2.
E) reduce excess IP addresses.
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
13
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48) Predictive search in Google's search engine:
A) maintains a history of your searches and then predicts what you will search on next.
B) uses a tracking service and cookies on your browser to predict search results.
C) uses a knowledge graph of what similar people searched on to predict your search interests.
D) uses a semantic approach to predict what you are looking for.
E) predicts what you are looking for as you enter words into the query box.
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
49) Instant messaging is a type of ________ service.
A) chat
B) cellular
C) email
D) wireless
E) network
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
50) ________ integrate disparate channels for voice communications, data communications,
instant messaging, email, and electronic conferencing into a single experience.
A) Wireless networks
B) Intranets
C) Virtual private networks
D) Modems
E) Unified communications
Answer: E
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
14
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51) A VPN:
A) is an encrypted private network configured within a public network.
B) is more expensive than a dedicated network.
C) provides secure, encrypted communications using Telnet.
D) is an Internet-based service for delivering voice communications.
E) is a proprietary networking service technology developed by individual corporations.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
52) Web browser software requests web pages from the Internet using which of the following
protocols?
A) URL
B) HTTP
C) DNS
D) HTML
E) FTP
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
53) Together, a protocol prefix, a domain name, a directory path, and a document name, are
called a(n):
A) uniform resource locator.
B) IP address.
C) third-level domain.
D) root domain.
E) child domain.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
15
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54) The most common web servers today are:
A) Microsoft IIS and IBM HTTP Server.
B) WebSTAR and Netscape Server.
C) IBM HTTP Server and Apache HTTP Server.
D) Netscape Server and Apache HTTP.
E) Apache HTTP Server and Microsoft IIS.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
55) Which of the following pulls content from websites and feeds it automatically to a user's
computers?
A) FTP
B) RSS
C) HTTP
D) Bluetooth
E) IPv6
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
56) Which of the following can be used to help a website achieve a higher ranking with the
major search engines?
A) VPN
B) IAB
C) SEM
D) SEO
E) RSS
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
16
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57) Which of the following statements is not true about search engines?
A) They are arguably the Internet's "killer app."
B) They have solved the problem of how users instantly find information on the Internet.
C) They are monetized almost exclusively by search engine marketing.
D) There are hundreds of search engines vying for user attention, with no clear leader having yet
emerged.
E) Users are increasingly using search engines on mobile devices.
Answer: D
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
58) Which process is used to protect transmitted data in a VPN?
A) Tunneling
B) PPP
C) VOIP
D) Packet-switching
E) Chaining
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
59) ________ monetizes the value of the data stored by search engines.
A) TCP/IP
B) RSS
C) WiMax
D) IoT
E) Search Engine Marketing
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
17
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60) Shopping bots use ________ software for searching the Internet.
A) Web 2.0
B) Web 3.0
C) intelligent agent
D) comparison
E) SEO
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
61) Which of the following is not a defining feature of Web 2.0?
A) Interactivity
B) Real-time user control
C) Semantic search
D) Social participation (sharing)
E) User-generated content
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
62) A(n) ________ is a commercial organization with a permanent connection to the Internet that
sells temporary connections to retail subscribers.
A) RSS
B) WAN
C) NFP
D) ISP
E) FTP
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
18
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63) The backbone networks of the Internet are typically owned by long-distance telephone
companies called:
A) regional network providers.
B) enhanced service providers.
C) internet bulk providers.
D) backbone providers.
E) network service providers.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
64) A(n) ________ is software for locating and managing stored web pages.
A) web server
B) net server
C) router
D) modem
E) hub
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
65) By 2018, it is estimated that more than 200 million Americans will use mobile search.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
66) Wikis allow visitors to change or add to the original posted material.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
67) The Domain Name System (DNS) converts domain names to IP addresses.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
19
Copyright © 2019 Pearson Education, Ltd.
68) VoIP technology delivers voice information in digital form using packet switching.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
69) Web 3.0 is an effort to add a layer of meaning to the existing web in order to reduce the
amount of human involvement in searching for and processing web information.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Reflective Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
70) Mobile search makes up more than 50% of all Internet searches.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Reflective Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
71) The "Internet of Things" refers to a vision of a pervasive Web, in which common objects are
connected to and controlled over the Internet.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
72) Digital rights activists believe differentiated pricing violates net neutrality principles.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
73) In addition to being an online retailer, Amazon is also a powerful product search engine.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
20
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74) The Internet of Things is based on billions of Internet-connected sensors throughout the
physical world.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
75) What is IPv6 and why is it necessary?
Answer: The Internet was not originally designed to handle the transmission of massive
quantities of data and billions of users. Because of sheer Internet population growth, the world is
about to run out of available IP addresses using the old addressing convention. The old
addressing system is being replaced by a new version of the IP addressing schema called IPv6
(Internet Protocol version 6), which contains 128-bit addresses (2 to the power of 128), or more
than a quadrillion possible unique addresses. IPv6 is compatible with most modems and routers
sold today, and IPv6 will fall back to the old addressing system if IPv6 is not available on local
networks. The transition to IPv6 will take several years as systems replace older equipment.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
76) What are the business advantages of using voice over IP (VoIP) technology?
Answer: Business can lower costs by using the Internet to deliver voice information, avoiding
the tolls charged by local and long-distance telephone networks. They can lower costs from not
having to create a separate telephone network. VOIP enables communication by supporting
Internet conference calls using video. VOIP also provides flexibility—phones can be added or
moved to different offices without rewiring or reconfiguring the network.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
77) What is Web 3.0, and how do you think Web 3.0 developments could impact businesses?
Answer: The key features of Web 3.0 are more tools for individuals to make sense out of the
trillions of pages on the Internet, or the millions of apps available for smartphones and a visual,
even three-dimensional (3D) web where you can walk through pages in a 3D environment.
Student views on the impact on businesses would vary. An example answer is: This potentially
could have huge effects on businesses as simple analysis becomes mechanized, requiring fewer
humans to perform this basic task.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
21
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78) Blogs, wikis, and social networking sites were designed for individuals to communicate with
each other. What uses do businesses have for these tools? Give specific examples.
Answer: Businesses can use these tools to reach out and market to potential new customers. For
example, many businesses have Facebook sites to market their product to specific groups on
Facebook. They can use these tools to support and give added value to existing customers. For
example, a software company could have a blog that discusses in-depth use of a software
product. Businesses can also use these tools within their company to communicate between
departments and share knowledge. For example, a company wiki could be set up as a repository
of expert information.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
79) What has made the Google search engine so successful?
Answer: The Google search engine became so successful because it was one of the first search
engines to incorporate page ranking. Not only does it index the web pages it finds according to
both keywords and combinations of keywords, it also ranks each page according to the number
of pages that link to it, and the number of pages it links to itself. This helped make search results
more relevant when compared to search engines relying solely on key words used on web pages.
A user could be relatively certain that they would find relevant information within the top results
of a Google search. Improved search results for the user, along with continual improvements to
its search engine, the development and other web applications, tools, and its Ad Sense product
where it sells keywords to the highest bidder has made Google so successful as a search engine
and marketing firm.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
80) Explain the Domain Name System. What are some of the common domain name extensions
currently available and what types of services do they designate?
Answer: The Domain Name System (DNS) converts domain names to IP addresses. Domain
names are the English-like names that correspond to the unique 32-bit numeric IP address for
each computer connected to the Internet. DNS is a hierarchy, with the root domain at the top,
top-level domains such as .com and .edu one level below, and second-level domains designate a
top-level name and a second-level name, like amazon.com. Common domain name extensions
include .edu (educational institutions), .gov (government agencies), .mil (military), .net (network
computers), .org (nonprofit organizations and foundations), .biz (business firms), and .info
(information providers). Additionally, countries have their own domain names. Answers may
cite a variety of other domain name extensions.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 7-3: How do the Internet and Internet technology work, and how do they support
communication and e-business?
22
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81) All of the following are physical components of an RFID system except:
A) bar codes.
B) antennas.
C) radio transmitters.
D) tags.
E) a stationary or handheld device.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
82) Which digital cellular standard is used widely throughout the world except the United States?
A) GSM
B) CDMA
C) WLAN
D) LTD
E) 4G
Answer: A
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
83) The concept of a future web in which it is commonplace for everyday objects to be
connected, controlled, or monitored over the Internet is called:
A) the Internet of Things.
B) the Semantic Web.
C) Internet2.
D) a 3-D Web.
E) Web 2.0.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
23
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84) Which of the following statements about RFID is not true?
A) RFIDs transmit only over a short range.
B) RFIDs use an antenna to transmit data.
C) Microchips embedded in RFIDs are used to store data.
D) RFIDs require line-of-sight contact to be read.
E) RFID tags and antennas come in a variety of shapes and sizes.
Answer: D
Difficulty: 2: Moderate
AACSB: Reflective Thinking
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
85) Wireless sensor networks (WSNs) are used for the following tasks except:
A) processing consumer transactions.
B) monitoring machines.
C) detecting radioactive materials.
D) protecting property.
E) identifying vehicles for trucking firms.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
86) 4G networks use which of the following standards?
A) GSM and LTD
B) CDMA and PAN
C) LTE and LTD
D) T-Mobile and AT&T
E) LTE and WiMax
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
87) The most appropriate wireless networking standard for creating PANs is:
A) I-mode.
B) IEEE 802.11b.
C) Wi-Fi.
D) Bluetooth.
E) RFID.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
24
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88) Bluetooth can be used to link up to ________ devices within a 10-meter area using lowpower, radio-based communication.
A) two
B) five
C) eight
D) fifteen
E) twenty
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
89) One or more access points positioned on a ceiling, wall, or other strategic spot in a public
place to provide maximum wireless coverage for a specific area are referred to as:
A) touch points.
B) netcenters.
C) hot points.
D) wireless hubs.
E) hotspots.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
90) The 802.11 set of standards is known as:
A) WLAN.
B) WSN.
C) Wi-Fi.
D) WiMax.
E) WAN.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
25
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91) The WiMax standard can transmit up to a distance of approximately:
A) 30 meters.
B) 500 meters.
C) 30 miles.
D) 5 miles.
E) 70 miles.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
92) Based on your reading of the examples in the chapter, which of the following would be the
best use of RFID for a business?
A) Logging transactions
B) Managing the supply chain
C) Lowering network costs
D) Enabling client communication
E) Improving employee engagement
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
93) Macy's Pick to the Last Unit system, described in the chapter-opening case, is an example of
which of the following?
A) Web 3.0 application
B) IoT application
C) BLE application
D) GPS application
E) RFID application
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
26
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94) A(n) ________ is a box consisting of a radio receiver/transmitter and antennas that links to a
wired network, router, or hub.
A) RFID receiver
B) WiMax receiver
C) access point
D) hub
E) hotspot
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
95) RFID technology is being gradually replaced by less costly technologies such as WSNs.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
96) Apple Pay uses an RFID-related technology called near field communication.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
97) NFC tags are always passive.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
98) How are RFID systems used in inventory control and supply chain management?
Answer: In inventory control and supply chain management, RFID systems capture and manage
more detailed information about items in warehouses or in production than bar coding systems.
If a large number of items are shipped together, RFID systems track each pallet, lot, or even unit
item in the shipment. This technology may help companies improve receiving and storage
operations by enhancing their ability to "see" exactly what stock is stored in warehouses or on
retail store shelves.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
27
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99) What are wireless sensor networks? How do they work and what are they used for?
Answer: Wireless sensor networks (WSNs) are networks of interconnected wireless devices that
are embedded into the physical environment to provide measurements of many points over large
spaces. These devices have built-in processing, storage, and radio frequency sensors and
antennas. They are linked into an interconnected network that routes the data they capture to a
computer for analysis. These networks range from hundreds to thousands of nodes. Because
wireless sensor devices are placed in the field for years at a time without any maintenance or
human intervention, they must have very low power requirements and batteries capable of lasting
for years. Wireless sensor networks are valuable in areas such as monitoring environmental
changes; monitoring traffic or military activity; protecting property; efficiently operating and
managing machinery and vehicles; establishing security perimeters; monitoring supply chain
management; or detecting chemical, biological, or radiological material.
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
100) What are some of the standards and networks used in digital cellular service, and where are
they in use?
Answer: Common cellular system standards include the Global System for Mobile
Communications (GSM), which is used in Europe and much of the world outside of the United
States. In the U.S., Code Division Multiple Access is used by Verizon and Sprint. It is a more
efficient system than GSM. The generations of networks in use today by cellular systems
includes 3G and 4G. 4G networks offer higher speeds than 3G. The standards in use by 4G
Networks are Long Term Evolution (LTE) and Worldwide Interoperability for Microwave
Access (WiMax).
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 7-4: What are the principal technologies and standards for wireless networking,
communication, and Internet access?
28
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Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 8 Securing Information Systems
1) Which of the following refers to policies, procedures, and technical measures used to prevent
unauthorized access, alteration, theft, or physical damage to information systems?
A) Security
B) Controls
C) Benchmarking
D) Algorithms
E) Identity management
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
2) Which of the following refers to all of the methods, policies, and organizational procedures
that ensure the safety of the organization's assets, the accuracy and reliability of its accounting
records, and operational adherence to management standards?
A) Legacy systems
B) SSID standards
C) Vulnerabilities
D) Security policy
E) Controls
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
3) Most computer viruses deliver a:
A) worm.
B) Trojan horse.
C) driveby download.
D) keylogger.
E) payload.
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
1
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2
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4) Which of the following statements about wireless security is not true?
A) SSIDs are broadcast multiple times and can be picked up fairly easily by sniffer programs.
B) Radio frequency bands are easy to scan.
C) An intruder who has associated with an access point by using the correct SSID is capable of
accessing other resources on the network.
D) Intruders can force a user's NIC to associate with a rogue access point.
E) Bluetooth is the only wireless technology that is not susceptible to hacking by eavesdroppers.
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
5) All of the following are specific security challenges that threaten the communications lines in
a client/server environment except:
A) errors.
B) tapping.
C) theft and fraud.
D) radiation.
E) sniffing.
Answer: A
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
6) All of the following are specific security challenges that threaten corporate servers in a
client/server environment except:
A) hacking.
B) malware.
C) denial-of-service attacks.
D) sniffing.
E) vandalism.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
7) All of the following are specific security challenges that threaten corporate systems in a
client/server environment except:
A) theft of data.
B) copying of data.
C) alteration of data.
D) radiation.
E) hardware failure.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
3
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8) CryptoLocker is an example of which of the following?
A) Worm
B) SQL injection attack
C) Sniffer
D) Evil twin
E) Ransomware
Answer: E
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
9) Which of the following statements about Internet security is not true?
A) The use of P2P networks can expose a corporate computer to outsiders.
B) A corporate network without access to the Internet is more secure than one that provides
access.
C) VoIP is more secure than the switched voice network.
D) Instant messaging can provide hackers access to an otherwise secure network.
E) Smartphones have the same security weaknesses as other Internet devices.
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
10) A Trojan horse:
A) is software that appears to be benign but does something other than expected.
B) is a virus that replicates quickly.
C) is malware named for a breed of fast-moving Near-Eastern horses.
D) installs spyware on users' computers.
E) is a type of sniffer used to infiltrate corporate networks.
Answer: A
Difficulty: 1: Easy
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
11) A salesperson clicks repeatedly on the online ads of a competitor in order to drive the
competitor's advertising costs up. This is an example of:
A) phishing.
B) pharming.
C) spoofing.
D) evil twins.
E) click fraud.
Answer: E
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
4
Copyright © 2019 Pearson Education, Ltd.
12) Which of the following is a virus that uses flaws in Windows software to take over a
computer remotely?
A) Sasser
B) Zeus
C) Cryptolocker
D) ILOVEYOU
E) Conficker
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
13) ________ is malware that hijacks a user's computer and demands payment in return for
giving back access.
A) A Trojan horse
B) Ransomware
C) Spyware
D) A virus
E) An evil twin
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
14) ________ is spyware that logs and transmits everything a user types.
A) Spyware
B) A Trojan horse
C) A keylogger
D) A worm
E) A sniffer
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
15) Which of the following statements about botnets is not true?
A) Eighty percent of the world's malware is delivered by botnets.
B) Botnets are often used to perpetrate DDoS attacks.
C) Ninety percent of the world's spam is delivered by botnets.
D) Botnets are often used for click fraud.
E) It is not possible to make a smartphone part of a botnet.
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
5
Copyright © 2019 Pearson Education, Ltd.
16) Using numerous computers to inundate and overwhelm the network from numerous launch
points is called a(n) ________ attack.
A) DDoS
B) DoS
C) SQL injection
D) phishing
E) botnet
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
17) Which of the following is not an example of a computer used as a target of crime?
A) Knowingly accessing a protected computer to commit fraud
B) Accessing a computer system without authority
C) Illegally accessing stored electronic communication
D) Threatening to cause damage to a protected computer
E) Breaching the confidentiality of protected computerized data
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
18) An employee clicks on a link in an email from what looks like a fellow employee and is
taken to a fraudulent web site which asks for personal information is an example of:
A) click fraud.
B) DDOS attack.
C) spear phishing.
D) pharming.
E) identity theft.
Answer: C
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
19) Which of the following specifically makes malware distribution and hacker attacks to disable
websites a federal crime?
A) Computer Fraud and Abuse Act
B) Economic Espionage Act
C) Electronic Communications Privacy Act
D) Data Security and Breach Notification Act
E) National Information Infrastructure Protection Act
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
6
Copyright © 2019 Pearson Education, Ltd.
20) The intentional defacement or destruction of a website is called:
A) spoofing.
B) cybervandalism.
C) cyberwarfare.
D) phishing.
E) pharming.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
21) Evil twins are:
A) Trojan horses that appears to the user to be a legitimate commercial software application.
B) email messages that mimic the email messages of a legitimate business.
C) fraudulent websites that mimic a legitimate business's website.
D) computers that fraudulently access a website or network using the IP address and
identification of an authorized computer.
E) bogus wireless network access points that look legitimate to users.
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
22) Pharming involves:
A) redirecting users to a fraudulent website even when the user has typed in the correct address
in the web browser.
B) pretending to be a legitimate business's representative in order to garner information about a
security system.
C) setting up fake website to ask users for confidential information.
D) using emails for threats or harassment.
E) setting up fake Wi-Fi access points that look as if they are legitimate public networks.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
23) Which of the following is the single greatest cause of network security breaches?
A) Viruses
B) User lack of knowledge
C) Trojan horses
D) Cyberwarfare
E) Bugs
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
7
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24) When a hacker discovers a security hole in software that is unknown to the software vendor
it is an example of:
A) sniffing.
B) social engineering.
C) phishing.
D) zero-day vulnerability
E) snooping
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
25) According to Ponemon Institute's 2016 Annual Cost of Cyber Crime Study, the average
annualized cost of cybercrime for benchmarked companies in six different countries was
approximately:
A) $900,000.
B) $9 million.
C) $90 million.
D) $9 billion.
E) $90 billion.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
26) Which of the following refers to eavesdroppers driving by buildings or parking outside and
trying to intercept wireless network traffic?
A) War driving
B) Sniffing
C) Cybervandalism
D) Drive-by tapping
E) Snooping
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
8
Copyright © 2019 Pearson Education, Ltd.
27) When hackers gain access to a database containing your personal private information, this is
an example of:
A) phishing.
B) spoofing.
C) social engineering.
D) identity theft.
E) pharming.
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
28) ________ identify the access points in a Wi-Fi network.
A) NICs
B) Mac addresses
C) URLs
D) UTMs
E) SSIDs
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
29) A foreign country attempting to access government networks in order to disable a national
power grid is an example of:
A) phishing.
B) denial-of-service attacks.
C) cyberwarfare.
D) cyberterrorism.
E) evil twins.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
30) According to the 2017 Identity Fraud Study by Javelin Strategy & Research, how much did
consumers lose to identity fraud in 2016?
A) $1.6 million
B) $16 million
C) $160 million
D) $1.6 billion
E) $16 billion
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
9
Copyright © 2019 Pearson Education, Ltd.
31) All of the following have contributed to an increase in software flaws except:
A) the growing complexity of software programs.
B) the growing size of software programs.
C) demands for timely delivery to markets.
D) the inability to fully test programs.
E) the increase in malicious intruders seeking system access.
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
32) Which of the following is an example of a keylogger?
A) Zeus
B) Conficker
C) Sasser
D) ILOVEYOU
E) Cryptolocker
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
33) As described in the chapter case, which of the following did hackers use to gain access to the
DNC network?
A) Trojan horse
B) Phishing emails
C) SQL injection attack
D) Computer worm
E) Pharming attack
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
34) Smartphones have the same security flaws as other Internet-connected devices.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
35) As described in the chapter case, losing smartphones is a rare cause of data breaches.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
10
Copyright © 2019 Pearson Education, Ltd.
36) A computer worm is a program that can copy itself to other computers on the network.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
37) The term cracker is used to identify a hacker with criminal or malicious intent.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
38) Wireless networks are more difficult for hackers to gain access to because radio frequency
bands are difficult to scan.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
39) A computer virus replicates more quickly than a computer worm.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
40) Phishing is a form of spoofing.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
41) Sniffers enable hackers to steal proprietary information from anywhere on a network,
including email messages, company files, and confidential reports.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
42) DoS attacks are used to destroy information and access restricted areas of a company's
information system.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
11
Copyright © 2019 Pearson Education, Ltd.
43) Zero defects cannot be achieved in larger software programs because fully testing programs
that contain thousands of choices and millions of paths would require thousands of years.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
44) Most IoT devices support sophisticated security approaches.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
45) Malicious software programs referred to as spyware include a variety of threats such as
computer viruses, worms, and Trojan horses.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
46) What are the security challenges faced by wireless networks?
Answer: Wireless networks are vulnerable because radio frequency bands are easy to scan. Both
Bluetooth and Wi-Fi networks are susceptible to hacking by eavesdroppers. Local area networks
(LANs) using the 802.11 standard can be easily penetrated by outsiders armed with laptops,
wireless cards, external antennae, and hacking software. Hackers use these tools to detect
unprotected networks, monitor network traffic, and, in some cases, gain access to the Internet or
to corporate networks. Wi-Fi transmission technology was designed to make it easy for stations
to find and hear one another. The service set identifiers (SSIDs) identifying the access points in a
Wi-Fi network are broadcast multiple times and can be picked up fairly easily by intruders'
sniffer programs. Wireless networks in many locations do not have basic protections against war
driving, in which eavesdroppers drive by buildings or park outside and try to intercept wireless
network traffic. A hacker can employ an 802.11 analysis tool to identify the SSID. An intruder
that has associated with an access point by using the correct SSID is capable of accessing other
resources on the network, using the Windows operating system to determine which other users
are connected to the network, access their computer hard drives, and open or copy their files.
Intruders also use the information they have gleaned to set up rogue access points on a different
radio channel in physical locations close to users to force a user's radio NIC to associate with the
rogue access point. Once this association occurs, hackers using the rogue access point can
capture the names and passwords of unsuspecting users.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
12
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47) Explain how an SQL injection attack works and what types of systems are vulnerable to this
type of attack.
Answer: SQL injection attacks take advantage of vulnerabilities in poorly coded web application
software to introduce malicious code into a company's systems and networks. These
vulnerabilities occur when a web application fails to properly validate or filter data entered by a
user on a web page, which might occur when ordering something online. An attacker uses this
input validation error to send a rogue SQL query to the underlying database to access the
database, plant malicious code, or access other systems on the network. Large web applications
using databases are most vulnerable, as they may have hundreds of places for inputting user data,
each of which creates an opportunity for an SQL injection attack.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
48) How is the security of a firm's information system and data affected by its people,
organization, and technology? Is the contribution of one of these dimensions any more important
than the other? Why?
Answer: There are various technological essentials to protecting an information system:
firewalls, authentication, encryption, antivirus protection etc. Without technology implemented
correctly, there is no security. A firm's employees are its greatest threat, in terms of
embezzlement and insider fraud, errors, and lax enforcement of security policies. Probably the
most important dimension is organization, because this is what determines a firm's business
processes and policies. The firm's information policies can most enhance security by stressing
intelligent design of security systems, appropriate use of security technology, and the usability of
its security processes.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?
49) The HIPAA Act of 1996:
A) requires financial institutions to ensure the security of customer data.
B) specifies best practices in information systems security and control.
C) imposes responsibility on companies and management to safeguard the accuracy of financial
information.
D) outlines medical security and privacy rules.
E) identifies computer abuse as a crime and defines abusive activities.
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
13
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50) The Gramm-Leach-Bliley Act:
A) requires financial institutions to ensure the security of customer data.
B) specifies best practices in information systems security and control.
C) imposes responsibility on companies and management to safeguard the accuracy of financial
information.
D) outlines medical security and privacy rules.
E) identifies computer abuse as a crime and defines abusive activities.
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
51) The Sarbanes-Oxley Act:
A) requires financial institutions to ensure the security of customer data.
B) specifies best practices in information systems security and control.
C) imposes responsibility on companies and management to safeguard the accuracy of financial
information.
D) outlines medical security and privacy rules.
E) identifies computer abuse as a crime and defines abusive activities.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
52) Which of the following is a type of ambient data?
A) Computer log containing recent system errors
B) A file deleted from a hard disk
C) A file that contains an application's user settings
D) A set of raw data from an environmental sensor
E) Data that has been recorded over
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
53) Computer forensics tasks include all of the following except:
A) presenting collected evidence in a court of law.
B) securely storing recovered electronic data.
C) collecting physical evidence on the computer.
D) finding significant information in a large volume of electronic data.
E) recovering data from computers while preserving evidential integrity.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
14
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54) Blockchain refers to a technology that:
A) uses a distributed ledger system of transactions.
B) uses a centralized data store in the cloud.
C) relies on the Internet to provide secure transactions.
D) uses existing banking systems to transfer funds.
E) relies on peer-to-peer networks.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-2: What is the business value of security and control?
55) Three major concerns of system builders and users are disaster, security, and human error. Of
the three, which do you think is most difficult to deal with? Why?
Answer: Student answers will vary. Example answers are: Disaster might be the most difficult
because it is unexpected, broad-based, and frequently life threatening. In addition, the company
cannot know if the disaster plan will work until a disaster occurs, and then it's too late to make
corrections. Security might be the most difficult because it is an ongoing problem, new viruses
are devised constantly, and hackers get smarter every day. Furthermore, damage done by a
trusted employee from inside cannot be obviated by system security measures. Human error
might be most difficult because it isn't caught until too late, and the consequences may be
disastrous. Also, administrative error can occur at any level and through any operation or
procedure in the company.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 8-2: What is the business value of security and control?
56) Hackers and their companion viruses are an increasing problem, especially on the Internet.
What are the most important measures for a firm to take to protect itself from this? Is full
protection feasible? Why or why not?
Answer: For protection, a company must institute good security measures, which will include
firewalls, investigation of personnel to be hired, physical and software security and controls,
antivirus software, and internal education measures. These measures are best put in place at the
time the system is designed, and careful attention paid to them. A prudent company will engage
in disaster protection measures, frequent updating of security software, and frequent auditing of
all security measures and of all data upon which the company depends. Full protection may not
be feasible in light of the time and expenses involved, but a risk analysis can provide insights
into which areas are most important and vulnerable. These are the areas to protect first.
Difficulty: 2: Moderate
AACSB: Analytical Thinking; Information Technology; Written and Oral Communication
LO: 8-2: What is the business value of security and control?
15
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57) Define computer forensics and describe the types of problems it is designed to address.
Answer: Computer forensics involves the scientific collection, examination, authentication,
preservation, and analysis of data held on or retrieved from computer storage media in such a
way that the information can be used as evidence in a court of law. It deals with the following
problems:
• Recovering data from computers while preserving evidential integrity
• Securely storing and handling recovered electronic data
• Finding significant information in a large volume of electronic data
• Presenting the information to a court of law
Electronic evidence may reside on computer storage media in the form of computer files and as
ambient data, which are not visible to the average user. An example might be a file that has been
deleted on a PC hard drive. Data that a computer user may have deleted on computer storage
media can be recovered through various techniques. Computer forensics experts try to recover
such hidden data for presentation as evidence. An awareness of computer forensics should be
incorporated into a firm's contingency planning process.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 8-2: What is the business value of security and control?
58) Your company, an online discount pet supply store, has calculated that a loss of Internet
connectivity for 3 hours results in a potential loss of $2,000 to $3,000 and that there is a 50%
chance of this occurring each year. What is the annual expected loss from this exposure?
A) $500
B) $1,000
C) $1,250
D) $1,500
E) $2,500
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
59) Implementation controls:
A) can be classified as input controls, processing controls, and output controls.
B) govern the design, security, and use of computer programs and the security of data files in
general throughout the organization.
C) apply to all computerized applications and consist of a combination of hardware, software,
and manual procedures that create an overall control environment.
D) include software controls, computer operations controls, and implementation controls.
E) Audit the systems development process at various points to ensure that the process is properly
controlled and managed.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-3: What are the components of an organizational framework for security and control?
16
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60) ________ controls formalize standards, rules, procedures, and control disciplines to ensure
that the organization's general and application controls are properly executed and enforced.
A) Software
B) Administrative
C) Data security
D) Implementation
E) Input
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-3: What are the components of an organizational framework for security and control?
61) An analysis of an information system that rates the likelihood of a security incident occurring
and its cost would be included in which of the following?
A) Security policy
B) AUP
C) Risk assessment
D) Business impact analysis
E) Business continuity plan
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
62) A statement ranking information risks and identifying security goals would be included in
which of the following?
A) Security policy
B) AUP
C) Risk assessment
D) Business impact analysis
E) Business continuity plan
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
63) Which of the following defines acceptable uses of a firm's information resources and
computing equipment?
A) An information systems audit policy
B) A CA policy
C) A MSSP
D) A UTM system
E) An AUP
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
17
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64) Which of the following focuses primarily on the technical issues of keeping systems up and
running?
A) Business continuity planning
B) Security policies
C) Disaster recovery planning
D) An AUP
E) An information systems audit
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
65) An acceptable use policy defines acceptable uses of the firm's information resources and
computing equipment.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-3: What are the components of an organizational framework for security and control?
18
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66) How can a firm's security policies contribute and relate to the six main business objectives?
Give examples.
Answer: A firm's security policies can contribute and relate to the six main business objectives
as follows:
(1) Operational excellence: Security policies are essential to operational excellence. A firm's
daily transactions can be severely disrupted by cybercrime such as hackers. A firm's efficiency
relies on accurate data. In addition, information assets have tremendous value, and the
repercussions can be devastating if they are lost, destroyed, or placed in the wrong hands.
(2) New products, services, business models. Security policies protect a company's ideas for new
products and services, which could be stolen by competitors. Additionally, enhanced security
could be seen by a customer as a way to differentiate your product.
(3) Customer and supplier intimacy: Customers rely on your security if they enter personal data
into your information system, for example, credit card information into your e-commerce site.
The information you receive from customers and suppliers directly affects how able you are to
customize your product, service, or communication with them.
(4) Improved decision making: Secure systems make data accuracy a priority, and good decision
making relies on accurate and timely data. Lost and inaccurate data would lead to compromised
decision making.
(5) Competitive advantage: The knowledge that your firm has superior security than another
would, on an otherwise level playing field, make your firm more attractive to do business with.
Also, improved decision-making, new products and services, which are also affected by security
(see above), will contribute to a firm's competitive advantage. Strong security and control also
increase employee productivity and lower operational costs.
(6) Survival: New laws and regulations make keeping your security system up to date a matter of
survival. Inadequate security and control may result in serious legal liability. Firms have been
destroyed by errors in security policies.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 8-3: What are the components of an organizational framework for security and control?
67) What is the role of an information systems audit?
Answer: An information systems audit examines the firm's overall security environment as well
as controls governing individual information systems. The auditor should trace the flow of
sample transactions through the system and perform tests, using, if appropriate, automated audit
software. The information systems audit may also examine data quality.
The audit should review technologies, procedures, documentation, training, and personnel. A
thorough audit will even simulate an attack or disaster to test the response of the technology,
information systems staff, and business employees.
The audit lists and ranks all control weaknesses and estimates the probability of their occurrence.
It then assesses the financial and organizational impact of each threat. Management is expected
to devise a plan for countering significant weaknesses in controls.
Difficulty: 2: Moderate
AACSB: Application of Knowledge; Written and Oral Communication
LO: 8-3: What are the components of an organizational framework for security and control?
19
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68) How does disaster recovery planning differ from business continuity planning?
Answer: Disaster recovery planning devises plans for the restoration of disrupted computing and
communications services. Disaster recovery plans focus primarily on the technical issues
involved in keeping systems up and running, such as which files to back up and the maintenance
of backup computer systems or disaster recovery services. Business continuity planning, on the
other hand, focuses on how the company can restore business operations after a disaster strikes.
The business continuity plan identifies critical business processes and determines action plans for
handling mission-critical functions if systems go down.
Difficulty: 1: Easy
AACSB: Application of Knowledge; Written and Oral Communication
LO: 8-3: What are the components of an organizational framework for security and control?
69) WPA2 is a more effective way to secure a wireless network than WEP because it:
A) includes an AUP.
B) operates on a VPN.
C) uses much longer encryption keys.
D) uses symmetric encryption methods.
E) is part of most vendors UTM products.
Answer: C
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
70) Which of the following statements about passwords is not true?
A) Authentication cannot be established by the use of a password.
B) Password systems that are too rigorous may hinder employee productivity.
C) Passwords can be stolen through social engineering.
D) Passwords are often disregarded by employees.
E) Passwords can be sniffed when being transmitted over a network.
Answer: A
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
71) Two-factor authentication utilizes a(n):
A) unique password.
B) encrypted connection.
C) a multistep process of authentication.
D) a firewall.
E) a digital certificate.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
20
Copyright © 2019 Pearson Education, Ltd.
72) All of the following are currently being used as traits that can be profiled by biometric
authentication except:
A) fingerprints.
B) facial characteristics.
C) body odor.
D) retinal images.
E) voice.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
73) A firewall allows the organization to:
A) enforce a security policy on data exchanged between its network and the Internet.
B) check the accuracy of all transactions between its network and the Internet.
C) create an enterprise system on the Internet.
D) check the content of all incoming and outgoing email messages.
E) create access rules for a network.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
74) ________ use scanning software to look for known problems such as bad passwords, the
removal of important files, security attacks in progress, and system administration errors.
A) Stateful inspections
B) Intrusion detection systems
C) Application proxy filtering technologies
D) Packet filtering technologies
E) Firewalls
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
21
Copyright © 2019 Pearson Education, Ltd.
75) Currently, the protocols used for secure information transfer over the Internet are:
A) TCP/IP and SSL.
B) S-HTTP and CA.
C) HTTP and TCP/IP.
D) S-HTTP and SHTML.
E) SSL, TLS, and S-HTTP.
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
76) In which method of encryption is a single encryption key sent to the receiver so both sender
and receiver share the same key?
A) SSL/TLS
B) Symmetric key encryption
C) Public key encryption
D) Private key encryption
E) Distributed encryption
Answer: B
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
77) A digital certificate system:
A) uses third party CAs to validate a user's identity.
B) uses digital signatures to validate a user's identity.
C) uses tokens to validate a user's identity.
D) is used primarily by individuals for personal correspondence.
E) protects a user's identity by substituting a certificate in place of identifiable traits.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
22
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78) All of the following are types of information systems general controls except:
A) application controls.
B) computer operations controls.
C) hardware controls.
D) software controls.
E) administrative controls.
Answer: A
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
79) Fault tolerant information systems offer 100 percent availability because they use:
A) high-capacity storage.
B) a multitier server network.
C) redundant hardware, software, and power supplies.
D) dedicated phone lines.
E) a digital certificate system.
Answer: C
Difficulty: 1: Easy
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
80) In controlling network traffic to minimize slow-downs, a technology called ________ is used
to examine data files and sort low-priority data from high-priority data.
A) high availability computing
B) deep packet inspection
C) application proxy filtering
D) stateful inspection
E) unified threat management
Answer: B
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
23
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81) An authentication system in which a user must provide two types of identification, such as a
bank card and PIN, is called:
A) smart card authentication.
B) biometric authentication.
C) two-factor authentication.
D) symmetric key authorization.
E) token authentication.
Answer: C
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
82) Which of the following techniques stops data packets originating outside the organization,
inspects them, and passes the packets to the other side of an organizations firewall?
A) NAT
B) Packet filtering
C) Deep packet inspection
D) Stateful inspection
E) Application proxy filtering
Answer: E
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
83) Comprehensive security management products, with tools for firewalls, VPNs, intrusion
detection systems, and more, are called ________ systems.
A) DPI
B) MSSP
C) NSP
D) PKI
E) UTM
Answer: E
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
84) Organizations can use existing network security software to secure mobile devices.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
24
Copyright © 2019 Pearson Education, Ltd.
85) In cloud computing, accountability and responsibility for protection of sensitive data is
transferred to the cloud provider.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
86) Biometric authentication is the use of personal, biographic details such as the high school
you attended and the first street you lived on to provide identification.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
87) Packet filtering catches most types of network attacks.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
88) Application proxy filtering examines the application content of packets.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
89) SSL is a protocol used to establish a secure connection between two computers.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
90) Symmetric encryption uses two keys.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
25
Copyright © 2019 Pearson Education, Ltd.
91) Smartphones typically feature state-of-the-art encryption and security features, making them
highly secure tools for businesses.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
92) Authentication refers to verifying that a person is who he or she claims to be.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
93) In public key encryption the keys are mathematically related so that data encrypted with one
key can be decrypted using only the other key.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
94) A firewall is a combination of hardware and software that controls the flow of incoming and
outgoing network traffic.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Information Technology
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
95) Is the cloud a safer and more secure computing environment than an in-house network? Why
or why not?
Answer: Student evaluations will vary, but should include the understanding that using the cloud
for computing distributes data to remote services that a company will not have final control of,
that a company's cloud data will be stored alongside the data of other companies, and that
various safeguards should be in place to protect your data. A sample answer is: The safety of
cloud computing as compared to in-house network computing depends on the security
implemented both at the corporation and at the service provider. For example, the company will
need to ensure secure procedures and make sure that employees have secure passwords and
access levels. The cloud service provider should use encryption for all data, at a minimum.
Clients should make sure that the service provider complies with local privacy rules, external
security audits, and certifications and provides proof of encryption mechanisms.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
26
Copyright © 2019 Pearson Education, Ltd.
96) Why is software quality important to security? What specific steps can an organization take
to ensure software quality?
Answer: Software errors pose a constant threat to information systems, causing untold losses in
productivity. Growing complexity and size of software programs, coupled with demands for
timely delivery to markets, have contributed to an increase in software flaws or vulnerabilities. A
major problem with software is the presence of hidden bugs or program code defects. Studies
have shown that it is virtually impossible to eliminate all bugs from large programs. Flaws in
commercial software not only impede performance but also create security vulnerabilities that
open networks to intruders. To correct software flaws once they are identified, the software
vendor creates small pieces of software called patches to repair the flaws without disturbing the
proper operation of the software. Organizations must maintain best efforts to both make sure
purchased software is up to date and make sure their own software and programming is as bugfree as possible by employing software metrics and rigorous software testing. Ongoing use of
metrics allows the information systems department and end users to jointly measure the
performance of the system and identify problems as they occur. Examples of software metrics
include the number of transactions that can be processed in a specified unit of time, online
response time, the number of payroll checks printed per hour, and the number of known bugs per
hundred lines of program code. For metrics to be successful, they must be carefully designed,
formal, objective, and used consistently. Early, regular, and thorough testing will contribute
significantly to system quality. Good testing begins before a software program is even written by
using a walkthrough—a review of a specification or design document by a small group of people
carefully selected based on the skills needed for the particular objectives being tested. Once
developers start writing software programs, coding walkthroughs also can be used to review
program code. However, code must be tested by computer runs. When errors are discovered, the
source is found and eliminated through a process called debugging.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
27
Copyright © 2019 Pearson Education, Ltd.
97) You have just been hired as a security consultant by MegaMalls Inc., a chain of retail malls,
to make sure that the security of their information systems is up to par. Outline the steps you will
take to achieve this.
Answer: To ensure that the security of MegaMalls' information systems is up to par, I would
take the following steps:
(1) Establish what data and processes are important and essential to the company. Determine
what external and internal information is essential to the different employee roles in the
company.
(2) Conduct a security audit and create a risk assessment analysis.
(3) Establish what legal/governmental/industry standards need to be adhered to and which
international standards are relevant.
(4) Conduct a business impact analysis and determine a disaster recovery and business continuity
plan.
(5) Create a security policy that defines an acceptable use policy, authorization policies and
processes.
(6) Plan for any change management needed.
(7) Determine how the success of your policy will be measured and set up means for measuring
this.
(8) Implement such policies.
(9) Measure and evaluate the effectiveness of the policy and make any additional adjustments.
Difficulty: 3: Challenging
AACSB: Analytical Thinking; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
98) What is a digital certificate? How does it work?
Answer: Digital certificates are data files used to establish the identity of users and electronic
assets for protection of online transactions. A digital certificate system uses a trusted third party,
known as a certification authority, to validate a user's identity. The CA verifies a digital
certificate user's identity offline. This information is put into a CA server, which generates an
encrypted digital certificate containing owner identification information and a copy of the
owner's public key. The certificate authenticates that the public key belongs to the designated
owner. The CA makes its own public key available publicly either in print or perhaps on the
Internet. The recipient of an encrypted message uses the CA's public key to decode the digital
certificate attached to the message, verifies it was issued by the CA, and then obtains the sender's
public key and identification information contained in the certificate. Using this information, the
recipient can send an encrypted reply. The digital certificate system would enable, for example, a
credit card user and a merchant to validate that their digital certificates were issued by an
authorized and trusted third party before they exchange data. Public key infrastructure (PKI), the
use of public key cryptography working with a certificate authority, is now widely used in ecommerce.
Difficulty: 2: Moderate
AACSB: Information Technology; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
28
Copyright © 2019 Pearson Education, Ltd.
99) Name and describe four firewall screening technologies.
Answer: There are a number of firewall screening technologies, including static packet filtering,
stateful inspection, Network Address Translation, and application proxy filtering. They are
frequently used in combination to provide firewall protection.
• Packet filtering examines selected fields in the headers of data packets flowing back and forth
between the trusted network and the Internet, examining individual packets in isolation. This
filtering technology can miss many types of attacks.
• Stateful inspection provides additional security by determining whether packets are part of an
ongoing dialogue between a sender and a receiver. It sets up state tables to track information
over multiple packets. Packets are accepted or rejected based on whether they are part of an
approved conversation or attempting to establish a legitimate connection.
• Network Address Translation (NAT) can provide another layer of protection when static packet
filtering and stateful inspection are employed. NAT conceals the IP addresses of the
organization's internal host computer(s) to prevent sniffer programs outside the firewall from
ascertaining them and using that information to penetrate internal systems.
• Application proxy filtering examines the application content of packets. A proxy server stops
data packets originating outside the organization, inspects them, and passes a proxy to the other
side of the firewall. If a user outside the company wants to communicate with a user inside the
organization, the outside user first communicates with the proxy application, and the proxy
application communicates with the firm's internal computer. Likewise, a computer user inside
the organization goes through the proxy to talk with computers on the outside.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
100) Explain how two-factor authentication increases security.
Answer: Two-factor authentication increases security by validating users by a multistep process.
To be authenticated, a user must provide two means of identification, one of which is typically a
physical token, such as a smartcard or chip-enabled bank card, and the other of which is typically
data, such as a password or PIN (personal identification number). Biometric data, such as
fingerprints, iris prints, or voice prints, can also be used as one of the authenticating mechanisms.
A common example of two-factor authentication is a bank card; the card itself is the physical
item, and the PIN is the data that go with it.
Difficulty: 3: Challenging
AACSB: Information Technology; Written and Oral Communication
LO: 8-4: What are the most important tools and technologies for safeguarding information
resources?
29
Copyright © 2019 Pearson Education, Ltd.
Essentials of MIS, 13GE (Laudon/Laudon)
Chapter 10 E-Commerce: Digital Markets, Digital Goods
1) What event marked the beginning of e-commerce?
A) The first product sold online
B) The first domain name registered
C) The first e-mail sent
D) The first paid advertisements placed on a website
E) The first product advertised online
Answer: D
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
2) All of the following are examples of "on demand" companies except:
A) Uber.
B) Airbnb.
C) Lyft.
D) Sidecar.
E) Instagram.
Answer: E
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
3) A marketplace extended beyond traditional boundaries and removed from a temporal and
geographic location is called a(n):
A) exchange.
B) marketspace.
C) online marketplace.
D) e-hub.
E) net marketplace.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
4) When did e-commerce begin?
A) 1965
B) 1983
C) 1995
D) 1999
E) 2000
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
1
Copyright © 2019 Pearson Education, Ltd.
5) What standards are referred to when discussing universal standards as a unique feature of ecommerce?
A) Internet technology standards
B) Common spoken and written languages
C) Universal measuring standards
D) Universal advertising and media format standards
E) EDI standards
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
6) All of the following are unique features of e-commerce technology, except:
A) personalization/customization.
B) interactivity.
C) transparency.
D) richness.
E) global reach.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
7) Which of the following dimensions of e-commerce technology involves engaging consumers
in a dialogue that dynamically adjusts the experience to the individual?
A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Information density
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
2
Copyright © 2019 Pearson Education, Ltd.
8) Which of the following dimensions of e-commerce technology involves the integration of
video, audio, and text marketing messages into a single marketing message and consumer
experience?
A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Social technology
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
9) Which of the following dimensions of e-commerce technology has the potential to raise the
quality of information?
A) Information density
B) Richness
C) Customization
D) Interactivity
E) Global reach
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
10) The effort required to locate a suitable product is called:
A) price discrimination.
B) search costs.
C) menu costs.
D) shopping costs.
E) location costs.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
11) Information density refers to the:
A) richness—complexity and content—of a message.
B) total amount and quantity of information delivered to consumers by merchants.
C) total amount and quantity of information available to all market participants.
D) amount of information available to reduce price transparency.
E) amount of physical storage space needed to store data about a specific entity, such as a
product or consumer.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
3
Copyright © 2019 Pearson Education, Ltd.
12) Selling the same goods to different targeted groups at different prices is called:
A) cost customization.
B) cost optimization.
C) price gouging.
D) cost personalization.
E) price discrimination.
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
13) Information ________ exists when one party in a transaction has more information that is
important for the transaction than the other party.
A) transparency
B) asymmetry
C) complexity
D) discrimination
E) competition
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
14) Changing the prices of products based on the level of demand characteristics of the customer
is called ________ pricing.
A) menu
B) dynamic
C) flexible
D) asymmetric
E) customized
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
15) Removing the business process layers in a distribution channel is called:
A) disintermediation.
B) BPR.
C) market segmentation.
D) network effects.
E) market transparency.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
4
Copyright © 2019 Pearson Education, Ltd.
16) In digital markets:
A) search costs increase.
B) menu costs decline.
C) switching costs decline.
D) network costs decline.
E) information asymmetry increases.
Answer: B
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
17) Compared to digital markets, traditional markets have:
A) lower search costs.
B) stronger network effects.
C) higher delayed gratification effects.
D) reduced asymmetry.
E) higher transaction costs.
Answer: E
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
18) Compared to traditional goods, digital goods have:
A) greater pricing flexibility.
B) higher delivery costs.
C) lower production costs.
D) higher inventory costs.
E) higher marginal costs.
Answer: A
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
19) Compared to digital goods, traditional goods have:
A) higher costs of production.
B) lower marginal costs per unit.
C) lower copying costs.
D) similar marketing costs.
E) more variable pricing.
Answer: D
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
5
Copyright © 2019 Pearson Education, Ltd.
20) What is the primary benefit to consumers of disintermediation?
A) Faster service
B) Lower costs
C) Higher quality
D) Greater choices
E) None, because disintermediation primarily benefits manufacturers.
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
21) What is the difference between personalization and customization, as applied to e-commerce
technologies?
A) Customization is any type of adjustment made to a product by the user; personalization refers
to a business changing a product or service for the user.
B) Personalization is any type of adjustment made to a product by the user; customization refers
to a business changing a product or service for the user.
C) Customization refers to adjusting marketing messages for a consumer; personalization refers
to adjusting a product or service based on a user's preferences.
D) Personalization refers to adjusting marketing messages for a consumer; customization refers
to adjusting a product or service based on a user's preferences.
E) There is no difference. Both terms refer to changing a product or communication for the
consumer.
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
22) E-commerce refers to the use of the Internet and the web to transact business.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
23) Retail consumer e-commerce is growing at double-digit rates.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
24) The Internet increases information asymmetry.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
6
Copyright © 2019 Pearson Education, Ltd.
25) All previous mass media in modern history, including the printing press, use a broadcast
model where content is created in a central location by experts.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
26) Disintermediation provides major benefits to the consumer.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
27) In general, for digital goods, the marginal cost of producing another unit is about zero.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
28) Traditional online marketing, such as display ads, have been replaced by video ads.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
29) Information asymmetry exists when there is more information about one product than there
is about a similar product.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
30) Cost transparency refers to the ability of consumers to discover what merchants actually pay
for products.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
31) Switching costs are the merchants' costs of changing prices.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
7
Copyright © 2019 Pearson Education, Ltd.
32) Web personalization refers to targeting ad messages to a person's clickstream behavior.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
33) What is the most profound way in which e-commerce and the Internet have changed the
relationship between companies and their customers? Support your answer.
Answer: Student answers will vary. A sample answer is: The most profound way in which ecommerce and the Internet have changed this relationship is in the shrinking of information
asymmetry. An information asymmetry exists when one party in a transaction has more
information that is important for the transaction than the other party. That information helps
determine their relative bargaining power. In digital markets, consumers and suppliers can "see"
the prices being charged for goods, and in that sense digital markets are said to be more
"transparent" than traditional markets. For example, until auto retailing sites appeared on the
web, there was a pronounced information asymmetry between auto dealers and customers. Only
the auto dealers knew the manufacturers' prices, and it was difficult for consumers to shop
around for the best price. Auto dealers' profit margins depended on this asymmetry of
information. Today's consumers have access to a legion of websites providing competitive
pricing information, and three-fourths of U.S. auto buyers use the Internet to shop around for the
best deal. Thus, the web has reduced the information asymmetry surrounding an auto purchase.
The Internet has also helped businesses seeking to purchase from other businesses reduce
information asymmetries and locate better prices and terms.
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
34) "Knowledge increases exponentially" is a phrase with which we are all familiar. How does
this concept apply to the emergence of the digital firm? Support your contentions.
Answer: Student answers will vary. A sample answer is: The exponential increases of
knowledge refer to shared information. For example, once the concept of a wheel is established,
inheritors of that knowledge do not have to "reinvent the wheel." The Internet is a tool similar to
the wheel: it is based on shared standards and universal tools. The Internet and shared
networking technologies are allowing new techniques for attracting customers and selling
customers to be developed and adapted very quickly. For example, although early Internet
retailers had difficulty setting up secure credit card transactions and payment systems, today
there are many systems in place as vendors step in to create shared tools for doing this. The
Internet is fostering shared knowledge and, as such, propagating ever greater increases in that
knowledge.
Difficulty: 3: Challenging
AACSB: Written and Oral Communication
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
8
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35) What are digital goods, and how does the Internet impact the market for digital goods?
Answer: Digital goods are goods that can be delivered over a digital network. Music tracks,
video, Hollywood movies, software, newspapers, magazines, and books can all be expressed,
stored, delivered, and sold as purely digital products. For the most part, digital goods are
intellectual property, which is defined as "works of the mind." Intellectual property is protected
from misappropriation by copyright, patent, and trade secret laws. Today, all these products are
delivered as digital streams or downloads while their physical counterparts decline in sales. The
impact of the Internet on the market for digital goods is nothing short of revolutionary.
Businesses dependent on physical products for sales—such as bookstores, music stores, book
publishers, music labels, and film studios—face the possibility of declining sales and even
destruction of their businesses. In general, for digital goods, the marginal cost of producing
another unit is about zero (it costs nothing to make a copy of a digital file such as a music file).
However, the cost of producing the original first unit is relatively high—in fact, it is nearly the
total cost of the product because there are few other costs of inventory and distribution. Costs of
delivery over the Internet are very low, inventory costs are low, marketing costs often remain the
same, and pricing can be highly variable. On the Internet, the merchant can change prices as
often as desired because of low menu costs.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
36) What is dynamic pricing and how is it used in e-commerce?
Answer: In dynamic pricing, the price of a product varies depending on the demand
characteristics of the customer or the supply situation of the seller. For instance, online retailers
from Amazon to Walmart change prices on many products based on time of day, demand for the
product, and users' prior visits to their sites. Using big data analytics, some online firms can
adjust prices at the individual level based on behavioral targeting parameters such as whether the
consumer is a price haggler (who will receive a lower price offer) versus a person who accepts
offered prices and does not search for lower prices. Prices can also vary by zip code, with higher
prices set for poor sections of a community. Uber, along with other ride services, uses surge
pricing to adjust prices of a ride based on demand (which always rises during storms and major
conventions).
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
9
Copyright © 2019 Pearson Education, Ltd.
37) Describe the use of personalization and customization in e-commerce. What business value
do these techniques have?
Answer: In personalization, merchants can target their marketing messages to specific
individuals by adjusting the message to a person's name, interests, and past purchases. For
example, Amazon.com greets each logged in user with their user name. With customization,
merchants can change the delivered product or service based on a user's preferences or prior
behavior. The Wall Street Journal Online allows you to select the type of news stories you want
to see first and gives you the opportunity to be alerted when certain events happen. The ability of
Internet technology to track customer behavior at websites, along with records of purchases and
other behavior, allows merchants to create a detailed profile of a customer. These profiles can be
used to create unique personalized web pages that display content or ads for products or services
of special interest to each user, improving the customer's experience and creating additional
value. The business value of personalization is reduced marketing costs, as you spend only the
money to target customers that are more likely to be receptive and are more profitable, and
improved sales results, from increased customer response to personalized sites that better serve
their own purposes and shopping needs. Personalization can achieve some of the benefits of
using individual salespeople for dramatically lower costs.
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?
38) Amazon.com is known primarily for its use of which of the following business models?
A) Content provider
B) Portal
C) Market creator
D) E-tailer
E) Transaction broker
Answer: D
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
39) Craigslist is an example of:
A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) P2P-commerce.
Answer: A
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
10
Copyright © 2019 Pearson Education, Ltd.
40) Which of the following types of e-commerce involves businesses selling goods and services
directly to individuals via the Internet?
A) B2C e-commerce
B) B2B e-commerce
C) C2C e-commerce
D) M-commerce
E) P2P e-commerce
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
41) As described in the opening case, what is the primary business model employed by
YouTube?
A) Portal
B) E-tailer
C) Content provider
D) Transaction broker
E) Market creator
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
42) Transaction brokers:
A) generate revenue from advertising or from directing buyers to sellers.
B) save users money and time by processing online sales transactions.
C) provide a digital environment where buyers and sellers can establish prices for products.
D) sell physical products directly to consumers or individual businesses.
E) provide online meeting places where people with similar interests can communicate.
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
43) Which of the following Internet business models involves a merchant creating an online
digital environment that enables people with like interests to share information?
A) Community provider
B) Service provider
C) Market creator
D) Transaction broker
E) Portal
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
11
Copyright © 2019 Pearson Education, Ltd.
44) Market creators:
A) save users money and time by processing online sales transactions.
B) provide a digital environment where buyers and sellers can establish prices for products.
C) create revenue by providing digital content over the web.
D) sell physical products directly to consumers or individual businesses.
E) generate revenue from advertising or from directing buyers to sellers.
Answer: B
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
45) Which of the following best illustrates the sales revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Pandora provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Netflix charges customers a monthly fee for access to its library of movies.
Answer: D
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
46) As described in the chapter case, Uber uses the ________ revenue model.
A) service provider
B) market creator
C) community provider
D) portal
E) transaction broker
Answer: B
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
47) Which of the following best illustrates the transaction fee revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Pandora provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Netflix charges customers a monthly fee for access to its library of movies.
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
12
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48) In the ________ revenue models, a firm offers some services for free but charges a
subscription fee for premium services.
A) free/freemium
B) subscription
C) transaction fee
D) affiliate
E) sales
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
49) Content providers use ________ systems to process large amounts of very small monetary
transactions cost-effectively.
A) subscription
B) mobile payment
C) transaction fee
D) micropayment
E) affiliate revenue
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
50) Which of the following best illustrates the advertising revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Facebook provides a social network for free, but shows sponsored content in users' News
Feeds.
D) Apple accepts micropayments for single music track downloads.
E) Netflix charges customers a monthly fee for access to its library of movies.
Answer: C
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
51) Which of the following companies uses the subscription revenue model?
A) Expedia
B) ETrade
C) Facebook
D) Netflix
E) Dropbox
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
13
Copyright © 2019 Pearson Education, Ltd.
52) As described in the opening case, what is YouTube's revenue model?
A) Advertising
B) Transaction fee
C) Subscription
D) Freemium
E) Affiliate
Answer: A
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
53) YouTube uses a form of dynamic pricing.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
54) eBay is an example of the market creator business model.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
55) Yahoo is an example of the portal business model.
Answer: TRUE
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
56) Podcasting allows subscribers to listen to live, streaming radio and other audio content.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-2: What are the principal e-commerce business and revenue models?
57) In the affiliate revenue model, firms derive revenue by selling information or services
through partner e-commerce sites.
Answer: FALSE
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-2: What are the principal e-commerce business and revenue models?
14
Copyright © 2019 Pearson Education, Ltd.
58) List and describe at least five different Internet business models. Which of these models do
you think would be the riskiest for a startup business today? Support your answer.
Answer: Internet business models include: e-tailer, transaction broker, market creator, content
provider, community provider, portal and service. The choice of riskiest model will depend on
the individual student. A sample answer is: Today the riskiest model would be a contentprovider, because most, if not all, of the major offline entertainment and content producers such
as television networks and newspapers are online. They would be your competitors, and already
have the means for content creation and distribution in place. All of the other business models do
not have the risk of creating brand new content.
Difficulty: 1: Easy
AACSB: Written and Oral Communication
LO: 10-2: What are the principal e-commerce business and revenue models?
59) List and describe the three main categories of e-commerce. Which do you think is ultimately
the most valuable to the individual consumer? Support your answer.
Answer: Business-to-consumer, business-to-business, and consumer-to-consumer. All three are
valuable to the consumer, but in the long run, business-to-business may be the most valuable to
the individual consumer because it will reduce prices and increase both goods and services.
(Other opinions, of course, are supportable.)
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-2: What are the principal e-commerce business and revenue models?
60) What methods could a portal use to generate revenue? Which do you think might be most
successful, and why?
Answer: Advertising, subscriptions, selling collected marketing information, and directing
buyers to sellers could all generate revenue. Student evaluations will vary. A sample answer is: I
would think the most successful method would be through collecting marketing information,
because as a portal that links to large amounts of external information and attracts repeat
customers, the portal would have the opportunity to gather a lot of information about each user.
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-2: What are the principal e-commerce business and revenue models?
61) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce
opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business
models for this opportunity?
Answer: Student answers will vary. A sample answer is: In terms of B2B e-commerce, Lucky's
might be able to procure goods over the Internet, use a private industrial network to coordinate
their supply chain with suppliers and manage inventory. Depending on the structure of the
gasoline retail business, industry net marketplaces and exchanges might be of use. In terms of
B2C e-commerce, there are not many opportunities, as it is inefficient to sell gasoline over the
Internet. Lucky's could make sure that its stations are listed in popular location-based mobile
services that help drivers find nearby gas stations.
Difficulty: 3: Challenging
AACSB: Written and Oral Communication
LO: 10-2: What are the principal e-commerce business and revenue models?
15
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62) List and describe the top five methods of online marketing and advertising formats, in terms
of estimated 2018 revenue.
Answer: The top five methods of online advertising are: display ads, which are banner ads with
interactive features that increasingly are behaviorally targeted to individual web activity (an
estimated $46.1 billion); search engine marketing, which employs text ads targeted at precisely
what the customer is looking for at the moment of shopping and purchase (an estimated $42.1
billion); video ads, which are the fastest-growing format, and use engaging, entertaining,
interactive video that are also often behaviorally targeted (an estimated $14.4 billion); rich media
ads, which use interactive, targeted, entertaining animations, games and/or puzzles (an estimated
$11.7 billion); and online classified, such as job, real estate, and services ads (an estimated $2.1
billion).
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10-2: What are the principal e-commerce business and revenue models?
63) Ikea asked for the help of its customers in designing new furniture. This is an example of:
A) prediction markets.
B) behavioral targeting.
C) long-tail marketing.
D) social shopping.
E) crowdsourcing.
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
64) Exposing an individual to ads that are chosen based on the choices of their friends is an
example of:
A) clickstream advertising.
B) behavioral targeting.
C) online profiling.
D) social marketing.
E) crowdsourcing.
Answer: D
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
16
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65) Which of the following best describes the digital social graph?
A) A person's direct and indirect relationships
B) All of a person's closest digital relationships
C) A collection of millions of personal social graphs
D) All of the online and offline relationships a person has
E) All of the relationships in an online community
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
66) Which of the following marketing formats is sales-oriented, rather than branding-oriented or
a mix?
A) Lead generation
B) Search engine
C) Rich media
D) Display ads
E) Video
Answer: B
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 10-3: How has e-commerce transformed marketing?
67) Facebook's Like button is an example of which of the following?
A) Social sign-on
B) Collaborative shopping
C) Network notification
D) Social search
E) Newsfeed
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
68) An environment where consumers can share their shopping experiences with one another by
viewing products, chatting, or texting about brands, products, and services is an example of:
A) network notification.
B) web personal marketing.
C) collaborative shopping.
D) social search.
E) social sign-on.
Answer: C
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
17
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69) ________ involves placing ads in social network newsfeeds or within traditional editorial
content, such as a newspaper article.
A) Behavioral targeting
B) Crowdsourcing
C) Native advertising
D) Demand prediction software
E) Lead generation marketing
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
70) Rich media advertisements are used to strengthen brands.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-3: How has e-commerce transformed marketing?
71) Behavioral targeting occurs at individual websites and within apps.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
72) Advertising networks track a user's behavior at thousands of websites.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
73) Viral marketing is like traditional word-of-mouth marketing except that it is spread via
online communities.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
74) Search engine marketing is the largest form of web marketing.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-3: How has e-commerce transformed marketing?
18
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75) You have been hired as a marketing consultant by a law firm in Los Angeles that specializes
in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the
firm's services?
Answer: Student answers will vary. A sample answer is: For marketing research, you could
advertise on search engines. You could pay for marketing research at relevant portals. You could
also collect customer information from the company's website. You could monitor relevant blogs
to see what issues are of concern in juvenile justice, so as to address these concerns in your
advertising campaigns. To advertise, you could advertise on search engine results and at relevant
portals or legal information content providers. If it were feasible, you could create a juvenile
justice portal and blog for the company in order to attract users from whom you could gather
market research as well as promote your services. You might also want to investigate social
network marketing—assuming that your clients might be the best leads for other clients.
Difficulty: 3: Challenging
AACSB: Written and Oral Communication
LO: 10-3: How has e-commerce transformed marketing?
76) Website tracking software can log the path a customer took through the website, the time
spent on the site, and what geographic area, in general, the customer is from, all of which can
help in customer analysis. It can also log the customer's operating system and which browser the
customer is using. How could these last two data items be of interest to a company? Give
examples.
Answer: Student answers will vary, but should include an understanding that customer OS and
browser interact technologically with a website and might be relevant in data analysis. An
example is: Customer OSs and browsers could help a company determine what technical
functionalities could be used in the site. For example, if it found out that a significant percentage
of its users are using mobile browsers, they might want to make sure that the website is easily
used by various mobile devices. Secondly, this data might be relevant in data mining or other
analysis. For example, a retail clothing company might find that a significant portion of their
most valued customers use an Apple operating system, and from other data analysis know that
Apple users are more likely to purchase cashmere sweaters. Then the company may want to
place a greater emphasis on selling the cashmere sweaters.
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-3: How has e-commerce transformed marketing?
77) Which of the following statements about EDI is not true?
A) Each major industry in the United States has EDI standards.
B) Today, EDI is only used for document automation.
C) Many organizations still use private networks for EDI.
D) EDI systems are increasingly web-enabled.
E) About 80 percent of online B2B e-commerce is still based on EDI.
Answer: B
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
19
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78) The process of sourcing goods and materials, negotiating with suppliers, paying for goods,
and making delivery arrangements is called:
A) e-procurement.
B) SCM.
C) procurement.
D) distribution
E) production.
Answer: C
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
79) A secure website that links a large firm to its suppliers and other key business partners is
called a(n):
A) e-hub.
B) marketspace.
C) exchange.
D) private industrial network.
E) net marketplace.
Answer: D
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 10-4: How has e-commerce affected business-to-business transactions?
80) Which of the following statements about Net marketplaces is not true?
A) Some Net marketplaces sell direct goods.
B) Some Net marketplaces serve vertical markets.
C) Some Net marketplaces sell indirect goods.
D) Some Net marketplaces support contractual purchases based on long-term relationships.
E) Some Net marketplaces are owned by a single firm and used to link solely to the firm's
suppliers and key business partners.
Answer: E
Difficulty: 3: Challenging
AACSB: Analytical Thinking
LO: 10-4: How has e-commerce affected business-to-business transactions?
81) Which of the following statements about exchanges is not true?
A) Exchanges are independently owned third-party Net marketplaces.
B) Some exchanges provide vertical markets.
C) Exchanges are the most successful form of B2B commerce.
D) Some exchanges enable a spot market.
E) Go2Paper is an example of an exchange.
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
20
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82) Which of the following is an example of a direct good in the automobile industry?
A) Computer equipment
B) Paper
C) Office furniture
D) Roofing shingles
E) Sheet steel
Answer: E
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
83) Which of the following is an example of a private industrial network?
A) Exostar
B) Go2Paper
C) Elemica
D) Expedia
E) VW Group Supply
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
84) Procurement involves all of the following except:
A) negotiating with suppliers.
B) paying for goods.
C) making delivery arrangements.
D) sourcing.
E) production scheduling.
Answer: E
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
85) EDI standards that take advantage of network communications have yet to be fully
implemented at the industry level.
Answer: FALSE
Difficulty: 2: Moderate
AACSB: Information Technology
LO: 10-4: How has e-commerce affected business-to-business transactions?
86) Net marketplaces may either support contractual purchasing based on long-term relationships
with designated suppliers or short-term spot purchasing.
Answer: TRUE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
21
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87) Exchanges have become one of the most popular types of Net marketplace because they
encourage competitive bidding that drives prices down.
Answer: FALSE
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
88) Indirect goods are not involved firsthand in the production process.
Answer: TRUE
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-4: How has e-commerce affected business-to-business transactions?
89) Which of the following is the largest mobile advertising market?
A) Google
B) Yahoo
C) Facebook
D) Microsoft
E) Twitter
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
90) A new social mobile app you are developing allows users to find friends who are logged in
and within a 10-mile radius. This would be categorized as a ________ service.
A) geosocial
B) geoinformation
C) geoadvertising
D) geomapping
E) geolocating
Answer: B
Difficulty: 1: Easy
AACSB: Analytical Thinking
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
22
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91) Geoadvertising sends ads to users based on their:
A) GPS locations.
B) home addresses.
C) shopping preferences.
D) website behaviors.
E) Google Maps settings.
Answer: A
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
92) What percent of online retailers now have m-commerce websites?
A) 15 percent
B) 25 percent
C) 55 percent
D) 75 percent
E) 85 percent
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
93) Which of the following is not an example of location-based services?
A) Foursquare
B) Google Maps
C) Waze
D) Uber
E) Netflix
Answer: E
Difficulty: 2: Moderate
AACSB: Application of Knowledge
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
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94) Define location-based services and describe the main categories of these services. Which of
the categories do you feel has the most potential in terms of e-commerce revenues, and why?
Answer: Location-based services are services that use GPS mapping services available on
smartphones to deliver value-added services. They include geosocial services, geoadvertising,
and geoinformation services. A geosocial service can tell you where your friends are meeting.
Geoadvertising services can tell you where to find the nearest Italian restaurant, and
geoinformation services can tell you the price of a house you are looking at, or about special
exhibits at a museum you are passing. Student answers as to the most valuable of these services
will vary; an example is: I feel that geoadvertising services have the most potential for profit, as
it is based on a profit-making mechanism: advertising. Geosocial services and geoinformation
services, by themselves, are more content- and communication-oriented.
Difficulty: 2: Moderate
AACSB: Written and Oral Communication
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
95) What are geosocial services and how are they being used?
Answer: Geosocial services help you find friends, or your friends to find you, by checking in to
the service, announcing your presence in a restaurant or other place. Your friends are instantly
notified. About 20 percent of smartphone owners use geosocial services. One example of a firm
using geosocial services is Foursquare. Foursquare provides a location-based social networking
service to 50 million registered individual users, who may connect with friends, update their
location, and provide reviews and tips for enjoying a location. Points are awarded for checking in
at designated venues. Users choose to post their check-ins on their accounts on Twitter,
Facebook, or both. Users also earn badges by checking in at locations with certain tags, for
check-in frequency, or for the time of check-in.
Difficulty: 1: Easy
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?
96) Which of the following is a milestone for the Phase 1: Planning phase of developing an ecommerce presence?
A) Website plan
B) Web mission statement
C) Functional website
D) Social media plan
E) Mobile media plan
Answer: B
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-6: What issues must be addressed when building an e-commerce presence?
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97) Which of the following is a milestone for the website development phase of building an ecommerce presence?
A) Web mission statement
B) Social media plan
C) Website plan
D) Web presence map
E) Functional website
Answer: C
Difficulty: 3: Challenging
AACSB: Application of Knowledge
LO: 10-6: What issues must be addressed when building an e-commerce presence?
98) In planning a robust e-commerce presence, you will want to consider the blog platform as
part of your ________ presence.
A) social media
B) e-mail
C) community
D) website
E) offline media
Answer: A
Difficulty: 2: Moderate
AACSB: Analytical Thinking
LO: 10-6: What issues must be addressed when building an e-commerce presence?
99) Which of the following is not one of four types of presence to be considered when building
an e-commerce presence?
A) Offline media
B) Websites
C) Social media
D) Corporate
E) E-mail
Answer: D
Difficulty: 1: Easy
AACSB: Application of Knowledge
LO: 10-6: What issues must be addressed when building an e-commerce presence?
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100) What are the steps involved in developing an e-commerce presence for a start-up company?
Answer: A one-year timeline for developing an e-commerce presence for a start-up company
would involve the following:
Phase 1: Planning, which involves envisioning the company's web presence and determining
personnel, and producing a web mission statement; Phase 2, Website development, which
involves acquiring content, developing a website design, arranging for hosting a website, and
producing a website plan; Phase 3: Web implementation, which involves developing keywords
and metatags, focusing on search engine optimization, identifying potential sponsors, and
producing a functional website; Phase 4: Social media plan, which involves identifying
appropriate social platforms and content for the company's products and services, and producing
a social media plan; Phase 5, Social media implementation, which involves developing
Facebook, Twitter and Pinterest presences, and results in a functioning social media presence,
and Phase 6: Mobile plan, which involves developing a mobile media plan and considering
options for porting the website.
Difficulty: 3: Challenging
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10-6: What issues must be addressed when building an e-commerce presence?
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