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| 1 | |
The benefits of e-products are that they can be: |
| | A) | transmitted rapidly. |
| | B) | transmitted accurately. |
| | C) | transmitted cheaply. |
| | D) | all of the above. |
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| 2 | |
Which of the following could not be an e-product? |
| | A) | books |
| | B) | music |
| | C) | video games |
| | D) | frozen vegetables |
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| 3 | |
An __________ good or service must be sampled before the user knows its value. |
| | A) | inexperienced |
| | B) | experience |
| | C) | new |
| | D) | high technology |
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| 4 | |
Information overload arises when the volume of available information is _____, but the cost of processing it is ____. |
| | A) | large, high |
| | B) | large, low |
| | C) | small, high |
| | D) | small, low |
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| 5 | |
Switching costs arise when existing costs are sunk. |
| | A) | True |
| | B) | False |
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| 6 | |
When the demand for a product partly depends on the number of existing users, this is an example of a: |
| | A) | network congestion. |
| | B) | network externality |
| | C) | network bubble |
| | D) | network proliferation |
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| 7 | |
When the marginal cost of a product is low, companies price products using: |
| | A) | a fixed charge. |
| | B) | a variable charge. |
| | C) | a two-part tariff. |
| | D) | a three-part tariff. |
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| 8 | |
Versioning is the deliberate creation of different qualities to facilitate price discrimination. |
| | A) | True |
| | B) | False |
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| 9 | |
Buyers need to____________, which explains why sellers allow ______________. |
| | A) | switch costs, information overload |
| | B) | experience goods before they can appraise their quality, sampling and browsing |
| | C) | switch costs, sampling and browsing |
| | D) | experience goods before they can appraise their quality, information overload |
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| 10 | |
Bundling is the joint supply of more than one product to reduce the need for: |
| | A) | price increases. |
| | B) | price cuts. |
| | C) | price discrimination. |
| | D) | more delivery vans. |
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| 11 | |
If a potential internet customer is confused by the volume of information, the internet supplier should use a____________. |
| | A) | filter |
| | B) | editor |
| | C) | screening device |
| | D) | web designer. |
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| 12 | |
Suppliers of e-products are likely to subsidize customers' early entry to achieve: |
| | A) | high sales volume. |
| | B) | presence in the market place. |
| | C) | network externalities. |
| | D) | high share price. |
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| 13 | |
Information technology may allow personalized pricing that will facilitate the development of competitive markets. |
| | A) | True |
| | B) | False |
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| 14 | |
The high set up cost and low marginal cost of supplying e-products suggests that the most effective pricing is: |
| | A) | a once and for all payment. |
| | B) | price equal to marginal cost. |
| | C) | price equal to average cost. |
| | D) | a two-part tariff. |
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| 15 | |
Software suppliers often provide full and 'light' editions of the same software at different prices, this is an example of ____________. |
| | A) | bundling |
| | B) | switching costs |
| | C) | versioning |
| | D) | exploitation |
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| 16 | |
Bundling different products reduces the need for _______________. |
| | A) | discrimination |
| | B) | versioning |
| | C) | special offers |
| | D) | discrimination |
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| 17 | |
The now defunct Betamax video cassette recorder technology is an example of the power of a ____________. |
| | A) | standard |
| | B) | technology |
| | C) | product |
| | D) | patent |
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| 18 | |
A strategic alliance is when group of suppliers provide a range of competing products. |
| | A) | True |
| | B) | False |
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| 19 | |
Asset price bubbles are caused by: |
| | A) | good harvests. |
| | B) | expectations. |
| | C) | high consumer spending. |
| | D) | tax cuts. |
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| 20 | |
When a speculative bubble bursts we expect prices to: |
| | A) | rise. |
| | B) | not move. |
| | C) | fall. |
| | D) | fluctuate around their current level. |
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