Management Information Systems, 14e (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 Web site.
E) The first product advertised online.
2) Based on your reading of the chapter, e-commerce is
A) 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.
E) declining as users lose interest.
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.
4) Recent developments in e-commerce include all of the following except
A) small businesses continue to flood the e-commerce marketplace.
B) social networking sites become a new platform for e-commerce.
C) Internet-based models of computing, such as smartphone apps.
D) the online demographic of shoppers broadens to match that of ordinary shoppers.
E) social sharing e-commerce sites extend the market creator business model.
5) What standards are referred to when discussing universal standards as a unique feature of e-
commerce?
A) Internet technology standards
B) common spoken and written languages
C) universal measuring standards
D) universal advertising and media format standards
E) EDI standards
6) All of the following are unique features of e-commerce technology, except
A) personalization/customization.
B) interactivity.
C) universality.
D) richness.
E) global reach.
7) 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
E) information density
8) 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
E) social technology
9) 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
E) global reach
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.
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.
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.
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
14) 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) customized
15) Reducing the business process layers in a distribution channel is called
A) disintermediation.
B) BPR.
C) market segmentation.
D) network effects.
E) market transparency.
16) Digital goods are goods that are
A) produced digitally.
B) sold over digital networks.
C) delivered digitally.
D) used with digital equipment.
E) created with software.
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.
18) Compared to traditional goods, digital goods have
A) greater pricing flexibility.
B) lower marketing costs.
C) higher production costs.
D) higher inventory costs.
E) lower menu costs.
19) Compared to traditional goods, digital goods incur
A) lower distribution costs.
B) higher marginal costs per unit.
C) equivalent copying costs.
D) similar inventory costs.
E) less disintermediation.
20) What is the primary benefit to consumers of disintermediation?
A) faster service
B) lower costs
C) higher quality
D) greater choices
E) None, disintermediation primarily benefits manufacturers.
21) E-commerce refers simply to the use of the Internet and the Web to transact business.
22) Retail consumer e-commerce is growing at single-digit rates.
23) The Internet shrinks information asymmetry.
24) 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.
25) Disintermediation provides major benefits to the distributor.
26) In general, for digital goods, the marginal cost of producing another unit is about zero.
27) Intellectual property refers to all forms of human expression, both tangible and intangible.
28) Traditional online marketing, such as display ads, is still the majority of all online marketing.
29) Information asymmetry exists when there is more information about one product than there
is about a similar product.
30) Price transparency refers to the ability of consumers to discover what merchants actually pay
for products.
31) Switching costs are the merchants’ costs of changing prices.
32) 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.
33) “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.
34) Which of the following Internet business models does Amazon.com use?
A) vontent provider
B) portal
C) market creator
D) e-tailer
E) transaction brokder
35) eBay is an example of
A) C2C e-commerce.
B) B2B e-commerce.
C) B2C e-commerce.
D) M-commerce.
E) P2P-commerce.
36) ________ refers to businesses selling goods and services electronically to individuals.
A) B2C e-commerce
B) Social e-commerce
C) C2C e-commerce
D) Disintermediation
E) M-commerce
37) ________ uses the community provider Internet business model.
A) iTunes
B) Yahoo
C) eBay
D) Google
E) Twitter
38) 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.
39) 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?
A) community provider
B) service provider
C) market creator
D) transaction broker
E) portal
40) 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.
41) 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.
E) Netflix charges customers a monthly fee for access to its library of movies.
42) 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.
E) Netflix charges customers a monthly fee for access to its library of movies.
43) 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.
E) Netflix charges customers a monthly fee for access to its library of movies.
44) 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
45) 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