Deck 10: E-Commerce: Digital Markets, Digital Goods

Question 1

EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.

Answer 1

False

Question 2

Ninety-six percent of all U.S. households with Internet access use a broadband connection.

Answer 2

True

Question 3

In general, for digital goods, the marginal cost of producing another unit is about zero.

Answer 3

True

Question 4

Disintermediation provides major benefits to the distributor.

Question 5

The Internet shrinks information asymmetry.

Question 6

E-commerce refers to the use of any networking technologies to transact business.

Question 7

An example of the content provider business model is Barnesandnoble.com, a retailer of printed books.

Question 8

Consumer e-commerce is still growing at approximately 25% annually.

Question 9

Because of outsourcing and increased automation, the costs of system maintenance and content creation have fallen and typically make up less than a quarter of Web site budgets.

Question 10

Podcasting allows subscribers to listen to live, streaming radio and other audio content.

Question 11

Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.

Question 12

Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.

Question 13

Telecommunications hardware and software is typically the least costly portion of a Web site budget.

Question 14

In general, the cost of hardware, software, and telecommunications for building and operating a Web site has fallen by over 50 percent since 2000.

Question 15

Intellectual property refers to all forms of human expression, both tangible and intangible.

Question 16

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.

Question 17

Behavioral targeting occurs at two levels: individual Web sites and through ISPs.

Question 18

Automobile manufacturing is an example of a vertical market.

Question 19

Eighty-five percent of online retailers now have m-commerce Web sites.

Question 20

Amazon's recommender system is an example of the network notification feature of social e-commerce.

Question 21

Compared to traditional goods, digital goods have

A) greater pricing flexibility.
B) lower marketing costs.
C) higher production costs.
D) higher inventory costs.

Question 22

The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology?

A) ubiquity
B) personalization/customization
C) richness
D) interactivity

Question 23

Which of the following is not a recent development in e-commerce?

A) Mobile e-commerce takes off.
B) Social networking sites become a new platform for e-commerce.
C) The music recording industry is disrupted as music creation and distribution become decentralized.
D) Online entertainment business models surge.

Question 24

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.

Question 25

Selling the same goods to different targeted groups at different prices is called

A) cost customization.
B) cost optimization.
C) price gouging.
D) price discrimination.

Question 26

The quality of ubiquity, as it relates to e-commerce, is illustrated by

A) the same set of standards being used across the globe.
B) the spread of plentiful, cheap information.
C) the enabling of commerce worldwide.
D) the availability of the Internet everywhere and anytime.

Question 27

The integration of video, audio, and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology?

A) ubiquity
B) personalization/customization
C) richness
D) interactivity

Question 28

The effort required to locate a suitable product is called

A) price discrimination.
B) search costs.
C) menu costs.
D) shopping costs.

Question 29

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

Question 30

Digital goods are goods that are

A) produced digitally.
B) sold over digital networks.
C) delivered digitally.
D) used with digital equipment.

Question 31

Through what channel did e-commerce first evolve?

A) online advertising sales
B) Internet portals
C) online book sales
D) Internet service providers

Question 32

Which of the following is not one of the unique features of e-commerce technology?

A) information density
B) transparency
C) richness
D) social technology

Question 33

Which of the following is not one of the current main areas of growth in mobile e-commerce?

A) sales of financial services
B) retail sales at the top mobile companies
C) sales of digital content
D) sales of apps

Question 34

How are the Internet and e-commerce causing severe disruption to the existing advertising business model?

A) Ties between customer and businesses are being rethought.
B) Technology players such as Yahoo! seek to dominate online advertising and expand into offline ad brokerage.
C) New methods of advertising, such as blog advertising, are emerging.
D) The market entry costs for online advertising services are extremely low.

Question 35

Reducing the business process layers in a distribution channel is called

A) disintermediation.
B) BPR.
C) market segmentation.
D) network effects.

Question 36

Varying a product's price according to the supply situation of the seller is called ________ pricing.

A) menu
B) flexible
C) dynamic
D) asymmetric

Question 37

The lowered costs of information storage, processing, and communication, along with the improvement of data quality, has resulted in which unique quality of e-commerce?

A) information density
B) richness
C) customization
D) interactivity

Question 38

Compared to digital markets, traditional markets have

A) lower search costs.
B) stronger network effects.
C) higher delayed gratification effects.
D) higher transaction costs.

Question 39

Which feature of Internet technology has had the most effect in the Internet's rapid spread across the globe?

A) ubiquity
B) global reach
C) universal standards
D) social technology

Question 40

Which of the following is an example of a geosocial mobile service?

A) Kickstarter.com
B) Foursquare
C) Shopkick
D) Facebook

Question 41

eBay is an example of

A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.

Question 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.

Question 43

Which of the following statements about B2B commerce is not true?

A) Eighty percent of online B2B e-commerce is still based on EDI.
B) B2B e-commerce represents approximately three-quarters of the overall B2B marketplace.
C) B2B e-commerce only includes commercial transactions between firms.
D) B2B e-commerce revenues in 2012 were over $4 trillion.

Question 44

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) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C) Flickr provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.

Question 45

Which of the following best describes why small world theory is important to e-commerce?

A) The products bought online by one individual will influence purchases by others.
B) The greater the number of people using your product, the more valuable it becomes.
C) You do not need to attract a large consumer base to become profitable.
D) Global products create a global community.

Question 46

Which of the following best illustrates the affiliate revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C) Flickr provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.

Question 47

________ describes the concept that a large group of people is better at making correct decisions than a single person.

A) The wisdom of crowds
B) Outsourcing
C) Crowdsourcing
D) Social graphing

Question 48

Consumers selling goods and services electronically to other consumers best describes

A) disintermediation.
B) C2C e-commerce.
C) M-commerce.
D) B2C e-commerce.

Question 49

Which of the following was the leading online advertising format in 2012?

A) display ads
B) e-mail
C) classifieds
D) search engine

Question 50

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) sourcing.

Question 51

In which of the following revenue models does a Web site charge a fee for access to some or all of its offerings on a continual, regular basis?

A) subscription
B) free/freemium
C) transaction fee
D) sales

Question 52

Which of the following businesses utilizes the content provider Internet business model?

A) Amazon.com
B) eBay.com
C) CNN.com
D) Motocross.com

Question 53

Selling products and services directly to individual consumers via the Internet best describes

A) B2B e-commerce.
B) C2C e-commerce.
C) M-commerce.
D) B2C e-commerce.

Question 54

Which of the following Internet business models does Amazon.com use?

A) content provider
B) portal
C) market creator
D) e-tailer

Question 55

Netflix's public announcement of a reward for a technology solution to its movie recommendation system is an example of

A) prediction markets.
B) behavioral targeting.
C) long-tail marketing.
D) crowdsourcing.

Question 56

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) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.
C) Flickr provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.

Question 57

Exposing an individual to ads that are chosen and based on the recorded and analyzed online behavior of the individual is referred to as

A) clickstream advertising.
B) behavioral targeting.
C) online profiling.
D) long tail marketing.

Question 58

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.

Question 59

EDI is

A) the use of Internet technologies for electronic data transactions.
B) the exchange between two organizations of standard transactions through a network.
C) electronic data invoicing.
D) electronic delivery infrastructure.

Question 60

Compared to traditional markets, digital markets have

A) lower distributed delivery costs.
B) higher marginal costs per unit.
C) equivalent copying costs.
D) similar inventory costs.

Question 61

A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n)

A) exchange.
B) vertical market.
C) private exchange.
D) e-hub.

Question 62

________ goods, such as office supplies, are those not involved firsthand in the production process.

Question 63

You are building an e-commerce Web site that will sell e-books and are looking for a hosted solution. Which of the following functionalities is least important for your business goals?

A) site tracking system
B) inventory management
C) digital catalog
D) customer database

Question 64

Before building an e-commerce site, business objectives and functionalities must be translated into a set of precise information ________.

Question 65

Pinterest and Kaboodle are examples of ________ shopping sites.

Question 66

An extranet 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.

Question 67

You are planning the requirements for a site tracking and reporting system for your company Web site. Which of the following information requirements would not be essential for this function?

A) number of unique visitors
B) pages visited
C) products purchased
D) secure credit card clearing

Question 68

In Web server ________, a firm purchases or leases a Web server but locates the server in a vendor's physical facility.

Question 69

Which of the following is the least costly way to build a Web site?

A) Outsource the Web site development to overseas vendors.
B) Use a hosted solution and pre-built templates.
C) Build your site yourself from scratch using existing software.
D) Use a site-building package.

Question 70

The Internet enables ________ marketing, by leveraging the fact that there is always some demand, however small, for a product.

Question 71

________ are the merchants' costs of changing prices.

Question 72

E-hubs are more ________ than private industrial networks.

A) transaction-oriented
B) collaborative
C) independent
D) supply-chain oriented

Question 73

A(n) ________ market is a peer-to-peer market in which participants bet on the outcomes of current events or business or social trends.

Question 74

You are advising an accounting firm that wants to establish its first Web site. Approximately how much of the Web site budget should you assign to purchasing software?

A) 10 percent
B) 25 percent
C) 50 percent
D) none, as no software will need to be purchased

Question 75

Goods that are involved in the actual production process are referred to as

A) raw materials.
B) direct goods.
C) purchasing goods.
D) indirect goods.

Question 76

The ________ targeting of ads results in consumers responding ten times more frequently than when delivered ads randomly.

Question 77

A mapping of a person's significant online, personal relationships is called a social

A) Web.
B) graph.
C) community.
D) map.

Question 78

Which of the following statements about m-commerce is not true?

A) In 2012, m-commerce represented less than 10 percent of all e-commerce.
B) M-commerce is the fastest growing form of e-commerce.
C) M-commerce annual revenues are approximately $30 billion.
D) In 2012, the top-grossing category of m-commerce was e-book sales.

Question 79

________ refers to the ability of consumers to discover what merchants actually pay for products.

Question 80

Online ________ marketing is like traditional word-of-mouth marketing except that it is spread via online communities.