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Essentials of MIS, 12e (Laudon)
Chapter 10 E-Commerce: Digital Markets, Digital Goods
1) When did e-commerce begin?
A) 1965
B) 1983
C) 1995
D) 1999
E) 2000
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
2) In 2015, what percentage of mobile phone users accessed the Internet by using their phones?
A) About 10 percent
B) About 33 percent
C) About 50 percent
D) About 75 percent
E) About 90 percent
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) private industrial network.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
4) All of the following are examples of “on demand” companies except:
A) Uber.
B) Airbnb.
C) Lyft.
D) Instacart.
E) Yummly.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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5) Disintermediation has which of the following effects?
A) It reduces the ties between consumers and businesses.
B) It lowers costs to the consumer.
C) It increases costs of manufacturing.
D) It reduces the cost of advertising.
E) It has no impact.
AACSB: Analytical Thinking
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
6) Which of the following is the best description of ubiquity as it relates to e-commerce
technology?
A) E-commerce technology employs the same set of standards across the globe.
B) E-commerce technology permits commercial transactions to cross cultural and national
boundaries.
C) E-commerce technology allows personalized messages to be delivered to individuals as well
as to groups.
D) E-commerce technology is available everywhere and anytime.
E) E-commerce technology reduces information costs.
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 is not one of the unique features of e-commerce technology?
A) Information density
B) Transparency
C) Richness
D) Social technology
E) Universal standards
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
8) Which of the following dimensions of e-commerce technology involves engaging consumers
in a dialog that dynamically adjusts the experience to the individual?
A) Ubiquity
B) Personalization/customization
C) Richness
D) Interactivity
E) Information density
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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9) 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) Information density
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
10) 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) Ubiquity
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
11) The effort required to locate a suitable product is called:
A) price discrimination.
B) search costs.
C) menu costs.
D) shopping costs.
E) market entry costs.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
12) 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) ease with which consumers can find out the variety of prices in a market.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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13) 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.
E) price optimization.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
14) 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) optimization
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
15) 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
E) Personalization
AACSB: Analytical Thinking
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
16) Varying a product’s price according to the supply situation of the seller is called ________
pricing.
A) menu
B) flexible
C) dynamic
D) asymmetric
E) transparent
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
5
17) Reducing the business process layers in a distribution channel is called:
A) disintermediation.
B) BPR.
C) market segmentation.
D) network effects.
E) dynamic pricing.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
18) All of the following are increased in traditional markets compared to digital markets except:
A) search costs.
B) menu costs.
C) switching costs.
D) network effects.
E) information asymmetry.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
19) Compared to digital markets, traditional markets have:
A) lower search costs.
B) stronger network effects.
C) higher delayed gratification effects.
D) higher transaction costs.
E) greater transparency.
AACSB: Analytical Thinking
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
20) Compared to traditional goods, digital goods have:
A) greater pricing flexibility.
B) lower marketing costs.
C) higher production costs.
D) higher inventory costs.
E) higher marginal costs.
AACSB: Analytical Thinking
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
6
21) Compared to traditional goods, digital goods have:
A) lower costs of production.
B) higher marginal costs per unit.
C) equivalent copying costs.
D) similar inventory costs.
E) lower distribution costs.
AACSB: Analytical Thinking
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
22) E-commerce refers to the use of any networking technologies to transact business.
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 single-digit rates.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
24) The Internet shrinks information asymmetry.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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.
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 distributor.
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.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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28) About 75 percent of all U.S. households have broadband access to the Internet in 2015.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
29) Advertising networks track a user’s behavior at thousands of websites.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
30) Price transparency refers to the ability of consumers to discover what merchants actually pay
for products.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
31) Menu costs are the merchants’ costs of changing prices.
AACSB: Application of Knowledge
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
32) “Knowledge increases exponentially” is a phrase with which we are all familiar. How does
this concept apply to electronic business and the emergence of the digital firm? Support your
contentions.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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33) Describe the use of personalization and customization in e-commerce. What business value
do these techniques have?
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
34) What are digital goods and how does the Internet impact the market for digital goods?
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 next to nothing to make multiple copies 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.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?
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35) What is dynamic pricing and how is it used in e-commerce?
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) Which of the following Internet business models does Amazon use?
A) Content provider
B) Portal
C) Market creator
D) E-tailer
E) Transaction broker
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
37) Craigslist is an example of:
A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) B2G e-commerce.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
38) Which of the following types of e-commerce involves selling products and services directly
to individual consumers via the Internet?
A) B2B e-commerce
B) G2B e-commerce
C) M-commerce
D) B2C e-commerce
E) B2G e-commerce
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
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39) Which of the following types of e-commerce involves consumers selling goods and services
to other consumers?
A) B2B e-commerce
B) C2C e-commerce
C) M-commerce
D) B2C e-commerce
E) B2G e-commerce
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
40) Which of the following is an example of the content provider Internet business model?
A) ETrade
B) eBay
C) iTunes
D) Facebook
E) Dropbox
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
41) 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) create revenue by providing digital content.
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
42) Which of the following Internet business models involves 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) E-tailer
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?