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

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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 14

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

Question 15

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

Question 16

The Internet shrinks information asymmetry.

Question 17

Automobile manufacturing is an example of a vertical market.

Question 18

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

Question 19

Disintermediation provides major benefits to the distributor.

Question 20

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

Question 21

Airlines and hotels operating their own reservation sites online earn less per ticket because they have eliminated travel agents as intermediaries.

Question 22

Streaming is a publishing method for music and video files that flows a continuous stream of content to a user's device without being stored locally on the device.

Question 23

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 24

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

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

Question 25

E-commerce remains the fastest growing form of commerce when compared to physical retail stores,services,and entertainment.

Question 26

The largest macropayment system on the Web is Apple's iTunes Store,which has more than 250 million credit customers who frequently purchase individual music tracks for 99 cents.

Question 27

In transaction pricing,the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller.

Question 28

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 29

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 30

A marketspace is a marketplace extended beyond traditional boundaries and removed from a temporal and geographic location.

Question 31

ChemConnect's Web site for buying and selling chemicals and plastics is an example of B2B e-commerce.

Question 32

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 33

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 34

A firm's revenue model describes how the firm will earn revenue,generate profits,and produce a superior return on investment.

Question 35

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 36

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 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

Through what channel did e-commerce first evolve?

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

Question 39

Search costs are the cost merchants must pay simply to bring their goods to market.

Question 40

Micropayment systems provide content providers with a cost-effective method for processing high volumes of very small monetary transactions (anywhere from $.25 to $5.00 per transaction).

Question 41

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 42

The effort required to locate a suitable product is called

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

Question 43

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 44

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 45

Digital goods are goods that are

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

Question 46

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 47

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 48

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 49

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 50

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 51

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 52

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 53

Reducing the business process layers in a distribution channel is called

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

Question 54

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 55

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

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

Question 56

Compared to traditional goods,digital goods have

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

Question 57

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 58

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 59

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 60

eBay is an example of

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

Question 61

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 62

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 63

E-hubs are more ________ than private industrial networks.

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

Question 64

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 65

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 66

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 67

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

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

Question 68

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 69

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 70

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 71

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 72

________ 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 73

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

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

Question 74

In a few years,___________________will be the most common Internet access device.

A) mobile phones
B) iPads
C) iPhones
D) Samsung phones

Question 75

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 76

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 77

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 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) sourcing.

Question 79

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 80

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