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Management Information Systems, 12e (Laudon)Chapter 10 E-commerce: Digital Markets, Digital Goods1) E-commerce refers to the use of any networking technologies to transact business.Answer: FALSEDiff: 2Page Ref: 373AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.12) Which of the following events signified the beginning of e-commerce?A) the first online advertisementsB) the first telephone salesC) the first online retail storeD) the first web siteAnswer: ADiff: 2Page Ref: 373AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.13) Retail e-commerce has grown consistently at double-digit rates since 1995.Answer: FALSEDiff: 3Page Ref: 373AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.14) The Internet shrinks information asymmetry.Answer: TRUEDiff: 2Page Ref: 378AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.15) Information asymmetry exists when one party in a transaction has more information for the transaction than the other party.Answer: TRUEDiff: 1Page Ref: 378AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.16) All previous mass media in modern history, including the printing press, used a broadcast model where content is created in a central location by experts.Answer: TRUEDiff: 2Page Ref: 378AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.17) Disintermediation provides major benefits to the distributor.Answer: FALSEDiff: 2Page Ref: 379AACSB: Analytic SkillsCASE: Evaluation in terms of assessObjective: 10.18) In general, for digital goods, the marginal cost of producing another unit is about zero. Answer: TRUEDiff: 2Page Ref: 380AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.19) An example of the service provider business model is Netflix, an online video store and streaming media outlet.Answer: FALSEDiff: 2Page Ref: 384AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.210) An example of the content provider business model is S, an online magazine.Answer: TRUEDiff: 1Page Ref: 383AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.211) Podcasting allows subscribers to listen to live, streaming radio and other audio content. Answer: FALSEDiff: 1Page Ref: 384AACSB: Analytic SkillsCASE: Analysis in terms of examineObjective: 10.212) Intellectual property refers to all forms of human expression, both tangible and intangible.Answer: FALSEDiff: 2Page Ref: 384AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.213) The goal of behavioral targeting is to increase the size of the audience to whom the advertiser can market a product.Answer: FALSEDiff: 2Page Ref: 392-393AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.314) In the technique of product customization, merchants customize marketing messages to specific individuals by adjusting the message for the persons name and interests.Answer: FALSEDiff: 2Page Ref: 378AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.315) A uses Web personalization as a major marketing tool.Answer: TRUEDiff: 3Page Ref: 393-395AACSB: Analytic SkillsCASE: Analysis in terms of appraiseObjective: 10.316) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.Answer: FALSEDiff: 2Page Ref: 396AACSB: Use of ITCASE: ComprehensionObjective: 10.417) Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.Answer: TRUEDiff: 3Page Ref: 398AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.418) Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down. Answer: FALSEDiff: 3Page Ref: 398-399AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.419) Automobile manufacturing is an example of a vertical market.Answer: TRUEDiff: 2Page Ref: 398AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.420) 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: TRUEDiff: 2Page Ref: 405AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.621) 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.Answer: FALSEDiff: 1Page Ref: 405AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.622) Based on your reading of the chapter, e-commerce isA) still in a revolutionary phase.B) widely accepted by consumers, although technology is still quickly changing.C) not yet fully accepted by consumers, although much of its driving technology is firmly in place.D) well entrenched as a form of modern commerce.Answer: ADiff: 2Page Ref: 374AACSB: Analytic SkillsCASE: Evaluation in terms of assessObjective: 10.123) The quality of ubiquity, as it relates to e-commerce, is illustrated byA) 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.Answer: DDiff: 2Page Ref: 374-375AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.124) 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.Answer: BDiff: 2Page Ref: 375AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.125) Which of the following is not a recent development in e-commerce?A) Wireless Internet connections grow rapidly.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.Answer: CDiff: 3Page Ref: 375AACSB: Analytic SkillsCASE: Analysis in terms of examineObjective: 10.126) 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. Answer: BDiff: 3Page Ref: 375AACSB: Analytic SkillsCASE: Evaluation in terms of assessObjective: 10.327) Which of the following is not one of the unique features of e-commerce technology?A) information densityB) transparencyC) richnessD) social technologyAnswer: BDiff: 2Page Ref: 376AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.128) The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology? A) ubiquityB) personalization/customizationC) richnessD) interactivityAnswer: DDiff: 2Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.129) 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) ubiquityB) personalization/customizationC) richnessD) interactivityAnswer: CDiff: 2Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.330) The effort required to locate a suitable product is calledA) price discrimination.B) search costs.C) menu costs.D) shopping costs.Answer: BDiff: 2Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.331) 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 densityB) richnessC) customizationD) interactivityAnswer: ADiff: 2Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.132) Information density refers to theA) richnesscomplexity and contentof 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.Answer: CDiff: 2Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.133) Selling the same goods to different targeted groups at different prices is calledA) cost customization.B) cost optimization.C) price gouging.D) price discrimination.Answer: DDiff: 1Page Ref: 377AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.334) Information _ exists when one party in a transaction has more information that is important for the transaction than the other party.A) transparencyB) asymmetryC) complexityD) discriminationAnswer: BDiff: 1Page Ref: 378AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.135) Which of the following businesses uses the market creator business model?A) an online auction houseB) an online newspaperC) a video-sharing siteD) an online booksellerAnswer: ADiff: 2Page Ref: 384AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.236) Varying a products price according to the supply situation of the seller is called _ pricing.A) menuB) flexibleC) dynamicD) asymmetricAnswer: CDiff: 2Page Ref: 379AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.337) Compared to digital markets, traditional markets haveA) lower search costs.B) stronger network effects.C) higher delayed gratification effects.D) higher transaction costs.Answer: DDiff: 3Page Ref: 380AACSB: Analytic SkillsCASE: Analysis in terms of compareObjective: 10.138) Reducing the business process layers in a distribution channel is calledA) disintermediation.B) BPR.C) market segmentation.D) network effects.Answer: ADiff: 2Page Ref: 379AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.139) Digital goods are goods that areA) produced digitally.B) sold over digital networks.C) delivered digitally.D) used with digital equipment.Answer: CDiff: 2Page Ref: 380AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.140) Compared to traditional goods, digital goods haveA) greater pricing flexibility.B) lower marketing costs.C) higher production costs.D) higher inventory costs.Answer: ADiff: 3Page Ref: 380AACSB: Analytic SkillsCASE: Analysis in terms of compareObjective: 10.141) Compared to traditional markets, digital markets haveA) lower distributed delivery costs.B) higher marginal costs per unit.C) equivalent copying costs.D) similar inventory costs.Answer: ADiff: 3Page Ref: 380AACSB: Analytic SkillsCASE: Analysis in terms of compareObjective: 10.142) Selling products and services directly to individual consumers via the Internet best describesA) B2B e-commerce.B) C2C e-commerce.C) M-commerce.D) B2C e-commerce.Answer: DDiff: 1Page Ref: 381AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.243) Consumers selling goods and services electronically to other consumers best describesA) disintermediation.B) C2C e-commerce.C) M-commerce.D) B2C e-commerce.Answer: BDiff: 1Page Ref: 3871AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.244) EBay is an example ofA) C2C e-commerce.B) B2B e-commerce.C) B2C e-commerce.D) M-commerce.Answer: ADiff: 2Page Ref: 381AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.245) Your company provides online tax preparation software. Users can download forms and read tips online without paying, but a fee is charged for using the advanced tax form management services. This is an example of which type of revenue model?A) subscriptionB) affiliateC) transaction feeD) free/freemiumAnswer: DDiff: 2Page Ref: 388AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.246) Which of the following businesses utilizes the content provider Internet business model?A) AB) eBC) CNN.comD) MAnswer: CDiff: 2Page Ref: 383AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.247) In which of the following Internet business models does a merchant create an online digital environment that enables people with like interests to share information or buy and sell goods?A) community providerB) service providerC) market creatorD) transaction brokerAnswer: ADiff: 2Page Ref: 384AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.248) Transaction brokersA) 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.Answer: BDiff: 1Page Ref: 384AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.249) Market creatorsA) 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.Answer: BDiff: 2Page Ref: 384AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.250) 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.Answer: DDiff: 2Page Ref: 388AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.251) 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.Answer: ADiff: 2Page Ref: 388AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.252) 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) subscriptionB) free/freemiumC) transaction feeD) salesAnswer: ADiff: 2Page Ref: 388AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.253) 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.Answer: BDiff: 2Page Ref: 389AACSB: Analytic SkillsCASE: Analysis in terms of categorizeObjective: 10.254) In a phenomenon called _, some argue that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts.A) the wisdom of crowdsB) outsourcingC) crowdsourcingD) social networkingAnswer: ADiff: 2Page Ref: 391-392AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.355) Netflixs public announcement of a reward for a technology solution to its movie recommendation system is an example ofA) prediction markets.B) behavioral targeting.C) long-tail marketing.D) crowdsourcing.Answer: DDiff: 2Page Ref: 392AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.356) Exposing an individual to ads that are chosen and based on the recorded and analyzed online behavior of the individual is referred to asA) clickstream advertising.B) behavioral targeting.C) online profiling.D) long-tail marketing.Answer: BDiff: 2Page Ref: 392-393AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.357) Which of the following was the leading marketing format in 2010?A) display adsB) e-mailC) classifiedsD) search engineAnswer: DDiff: 3Page Ref: 393AACSB: Reflective ThinkingCASE: ComprehensionObjective: 10.358) 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 2009 we

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