1. Lim Sei Kee @ cK

3.  eBay does not 'make' anything in the traditional sense - is it therefore a business? Justify your answer. (5 Marks)

4.  eBay INC owns eBay.com  It operates as an online auction and shopping website – people and businesses buy and sell a broad variety of goods and services worldwide.  Consumer-to-consumer corporation  Market: buyers & sellers

5.  Using examples, explain what inputs eBay might use in conducting its business. What are eBay's outputs? (5 Marks)

6.  INPUT: Computer, servers, webpage design  OUTPUT: Electronic payment, physical transfer of goods

7.  Explain how eBay makes a profit - use appropriate terminology in your answer. (4 Marks)

8.  Sellers pay fees to list their goods/services  Sellers pay a percentage when the item is sold  Every transaction is charged

9.  Using the figures in the evidence above, calculate the profit made by eBay in the first 3 months of 2005. Show all your workings and calculations clearly. (4 Marks)

10.  2005  Revenue: $1.032 billion ($1,032,000,000)  Cost: $186,000,000 + Overhead $509,000,000  Total cost: 695,000,000  Profit: Revenue – Total cost  $337,000,000

11.  What might a company like eBay use this profit for? (4 Marks)

12.  Increasing international trade, expansion to China, India  Acquiring companies: Paypal, Skype  Increase supply of goods  Better services

13.  What other factors might help you in deciding whether eBay has been a success as a business? (Hint: think of other objectives the business might have - the mission is one example!) (8 Marks)

14.  eBay is successful - It has achieved its mission to provide a global trading platform where practically anyone can trade practically anything. - Innovative business model - Get the customers the right product at the right time at the right place