Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Indirect goods are not involved firsthand in the production process.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following best illustrates the transaction fee revenue model?

Accepted Answer

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.F) B) and E)
G) A) and B)

Question 4

Which of the following best illustrates the affiliate revenue model?

Accepted Answer

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.F) A) and B)
G) All of the above

Question 5

Compared to traditional goods, digital goods incur

Accepted Answer

A)   lower distribution costs.
B)   higher marginal costs per unit.
C)   equivalent copying costs.
D)   similar inventory costs.
E)   less disintermediation.F) A) and C)
G) C) and E)

Question 6

Compared to digital markets, traditional markets have

Accepted Answer

A)   lower search costs.
B)   stronger network effects.
C)   higher delayed gratification effects.
D)   reduced asymmetry.
E)   higher transaction costs.F) B) and E)
G) All of the above

Question 7

Web personalization is used primarily as a major marketing tool.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Information asymmetry exists when there is more information about one product than there is about a similar product.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)   prediction markets.
B)   behavioral targeting.
C)   long-tail marketing.
D)   social shopping.
E)   crowdsourcing.F) D) and E)
G) B) and E)

Question 11

In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   Crowdsourcing
B)   A net marketplace
C)   A prediction market
D)   A futures auction
E)   A private exchangeF) B) and C)
G) A) and E)

Question 13

"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.

Accepted Answer

Student answers will vary. A sample answ...

Question 14

You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services?

Accepted Answer

Student answers will vary. A sample answ...

Question 15

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

Accepted Answer

A)   exchange.
B)   vertical market.
C)   private exchange.
D)   e-hub.
E)   private industrial network.F) C) and D)
G) A) and B)

Question 16

List and describe at least five different Internet business models. Which of these models do you think would be the most risky for a startup business today?
 Support your answer.

Accepted Answer

Internet business models include: e-tail...

Question 17

In the ________ revenue models, a firm offers some services for free but charges a subscription fee for premium services.

Accepted Answer

A)   free/freemium
B)   subscription
C)   transaction fee
D)   affiliate
E)   salesF) A) and E)
G) C) and E)

Question 18

An example of the market creator business model is eBay, a C2C auction site.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

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

"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.

Correct AnswerverifiedStudent answers will vary. A sample answ...View AnswerShow Answer

In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following best illustrates the transaction fee revenue model?

Correct AnswerverifiedShow Answer

An example of the market creator business model is eBay, a C2C auction site.

Correct AnswerverifiedShow Answer

Which of the following best illustrates the affiliate revenue model?

Correct AnswerverifiedShow Answer

List and describe at least five different Internet business models. Which of these models do you think would be the most risky for a startup business today? Support your answer.

Correct AnswerverifiedInternet business models include: e-tail...View AnswerShow Answer

Information asymmetry exists when there is more information about one product than there is about a similar product.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Compared to digital markets, traditional markets have

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Web personalization is used primarily as a major marketing tool.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services?

Correct AnswerverifiedStudent answers will vary. A sample answ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Compared to traditional goods, digital goods incur

Correct AnswerverifiedShow Answer

In the ________ revenue models, a firm offers some services for free but charges a subscription fee for premium services.

Correct AnswerverifiedShow Answer

Indirect goods are not involved firsthand in the production process.

Correct AnswerverifiedShow Answer

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Internet business models include: e-tail...
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Student answers will vary. A sample answ...
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