Chapter 1 Quiz: The Attention Economy

Part A: Multiple Choice (15 questions)

Select the single best answer for each question.

Question 1

Herbert Simon's 1971 essay argued that information abundance creates:

A) Greater access to knowledge for ordinary people B) A new kind of scarcity — scarcity of attention C) Economic inequality between information producers and consumers D) The end of traditional media business models

Answer: B

Explanation: Simon's central insight was the paradox that a wealth of information creates a poverty of attention. More information does not mean better-informed people; it means people must allocate their limited attention across an ever-growing supply of content.

Question 2

CPM stands for:

A) Cost Per Message B) Consumer Price Metric C) Cost Per Mille D) Click Per Minute

Answer: C

Explanation: CPM stands for "cost per mille," from the Latin word for thousand. It represents the price an advertiser pays for one thousand impressions — one thousand instances of an ad being displayed to users.

Question 3

Which of the following would most likely command the highest CPM rate?

A) A general-audience impression on a general news website B) An impression served to a 19-year-old with a part-time job C) An impression served to a 50-year-old high-income professional on a financial services platform D) An impression delivered in February to a user on a free gaming site

Answer: C

Explanation: CPM rates are highest for audiences with high income (more able to purchase expensive products), clear commercial intent (financial services platform signals financial interest), and favorable demographic characteristics for high-margin advertisers.

Question 4

The "penny press" model pioneered by Benjamin Day in 1833 established which foundational principle?

A) Content quality drives advertising revenue B) Subscription fees are more reliable than advertising C) Audiences pay for content with attention rather than money D) Newspapers can survive on cover price alone

Answer: C

Explanation: Day sold The New York Sun below cost and made up the difference through advertising. This established the founding transaction of advertising-supported media: readers pay with their attention, which is then sold to advertisers.

Question 5

The "stickiness ratio" (DAU/MAU) measures:

A) How long the average session lasts on a platform B) What fraction of monthly users return to the platform daily C) How many ads a user sees per hour D) The percentage of users who pay for premium subscriptions

Answer: B

Explanation: The stickiness ratio is calculated by dividing daily active users by monthly active users. A ratio of 60% means 60% of people who use the platform in any given month also use it on a typical day — indicating strong habit formation.

Question 6

Shoshana Zuboff's concept of "behavioral surplus" refers to:

A) The extra engagement generated by highly shareable content B) Behavioral data collected beyond what's needed for user services, used to build predictive models for commercial sale C) The additional time users spend on platforms beyond their stated intentions D) Revenue generated from behavioral health app partnerships

Answer: B

Explanation: Zuboff defines behavioral surplus as the data collected in excess of what is needed to provide the user service, which is then repurposed to build behavioral prediction models sold to commercial third parties.

Question 7

Which of the following best explains why "time-on-platform" replaced click-through rate as the dominant engagement metric?

A) Clicks are too difficult to measure accurately B) Time-on-platform is easier for regulators to audit C) CTR could be gamed by bots and didn't correlate well with genuine engagement D) Advertisers prefer paying for time rather than actions

Answer: C

Explanation: CTR had significant problems including click fraud (bots), accidental clicks (especially on mobile), and poor correlation with actual advertiser value. Time-on-platform better reflected whether users were genuinely engaged with the context in which ads appeared.

Question 8

Facebook's 2012 IPO at a valuation of approximately $104 billion was primarily a bet on:

A) The value of Facebook's proprietary software technology B) Revenue from Facebook's hardware division C) Future advertising revenue driven by projected DAU/MAU trajectory D) Revenue from licensing Facebook's data to government agencies

Answer: C

Explanation: Platform valuations are essentially discounted projections of future advertising revenue. Facebook's valuation at IPO reflected investor expectations that it would maintain and grow its DAU/MAU metrics (901M MAU, 58% stickiness at IPO time) and improve ad targeting.

Question 9

The first banner ad in internet history was sold in October 1994. Which company purchased it, and what was the initial click-through rate?

A) Microsoft; 12% B) AT&T; 44% C) IBM; 28% D) Netscape; 61%

Answer: B

Explanation: HotWired sold the first banner ad to AT&T in October 1994. The initial click-through rate was approximately 44% — an extraordinary figure that reflected novelty and has never been remotely replicated as banner ads became ubiquitous and ignored.

Question 10

Which of the following is NOT one of the five power asymmetries described in Chapter 1?

A) Scale of engineering investment B) Data asymmetry C) Geographic asymmetry D) Feedback loop asymmetry

Answer: C

Explanation: The chapter identifies five specific asymmetries: scale of engineering investment, data asymmetry, expertise asymmetry, feedback loop asymmetry, and switching cost asymmetry. Geographic asymmetry is not discussed in this context.

Question 11

Google's advertising revenue grew from $1.5 billion in 2004 to approximately $237 billion in 2023. The primary driver of this growth was:

A) Increasing the number of search queries processed B) Expanding into hardware product sales C) Improving the precision of user-advertiser matching and scaling the auction system D) Acquiring newspapers and television networks

Answer: C

Explanation: Google's revenue growth came primarily from increasing the accuracy of intent-matching (connecting the right user to the right advertiser at the right moment) and scaling the real-time auction system across billions of daily searches and across additional platforms (YouTube, Display Network).

Question 12

The chapter argues that dark patterns in social media design are best understood as:

A) The result of malicious intent by platform executives B) The logical output of misaligned structural incentives in the attention economy C) Violations of existing consumer protection law D) Inevitable features of all software design

Answer: B

Explanation: The chapter's central argument about dark patterns is that they emerge from structural incentives (the attention economy's logic of time-on-platform maximization) rather than from deliberate malice. This framing leads to different solutions than the "bad actors" framing.

Question 13

Predicted engagement scores, as used by platforms like TikTok, differ from measured past engagement in that they:

A) Are based on what users say they want rather than what they do B) Forecast how a specific user will respond to content they have never seen, based on behavioral patterns C) Are calculated manually by content moderators rather than algorithms D) Reflect advertiser preferences rather than user preferences

Answer: B

Explanation: Predicted engagement scores use machine learning to infer how a specific user will behave with content they haven't encountered, based on their prior behavior and the behavior of similar users. This moves from passive measurement to active behavioral modeling.

Question 14

The chapter distinguishes between two framings of social media overuse that it considers inadequate. These are:

A) Individual blame and corporate blame B) Techno-panic and techno-apologia C) Behavioral psychology and economic analysis D) Regulatory response and market response

Answer: B

Explanation: The chapter critiques "techno-panic" (social media is destroying society; phones are drugs) and "techno-apologia" (platforms give people what they want; technology is neutral) as both inadequate framings, advocating instead for an economic logic analysis.

Question 15

According to the chapter, fourth-quarter CPM rates (October-December) are higher than annual averages because:

A) Platform traffic is lower in Q4, making each impression rarer B) Advertisers compete intensely for attention during the holiday shopping season C) Government regulations restrict advertising in Q1-Q3 D) Users are more likely to click on ads during cold-weather months

Answer: B

Explanation: Holiday advertising competition drives Q4 CPMs 30-50% above annual averages. Retailers, brands, and consumer goods companies all compete simultaneously for user attention during the peak commercial season, bidding up auction prices.

Part B: True / False (4 questions)

Write T or F, followed by a one-sentence justification.

Question 16

True or False: Simon's 1971 essay was specifically about social media and its effects on attention.

Answer: F

Justification: Simon's essay was about organizational management and decision-making in information-rich environments — written decades before social media existed — but its insight about attention scarcity proved prescient for understanding the digital media landscape.

Question 17

True or False: The chapter argues that because the attention economy follows an economic logic, individual users bear no meaningful responsibility for their usage patterns.

Answer: F

Justification: The chapter explicitly states that "individual agency is real, it matters" and devotes Part IV of the book to effective individual responses; the structural framing is meant to supplement, not replace, individual responsibility.

Question 18

True or False: Behavioral surplus, as Zuboff describes it, is the same concept as targeted advertising.

Answer: F

Justification: Behavioral surplus specifically refers to data collected beyond what is needed for user services, used to build prediction models — this is distinct from targeted advertising, which existed before large-scale behavioral data collection and which Zuboff's framework extends beyond.

Question 19

True or False: The chapter asserts that platforms always prioritize user wellbeing when it conflicts with engagement metrics.

Answer: F

Justification: The chapter argues the opposite — that platforms have "limited incentive to care about the difference" between engagement and user benefit, because advertising revenue is tied to engagement metrics, not wellbeing outcomes.

Part C: Short Answer (3 questions)

Respond in 2-4 sentences each.

Question 20

In your own words, explain why DAU/MAU is a more useful metric for platform valuation than total registered users.

Sample Answer: Total registered users includes people who signed up and never returned, which tells advertisers little about the audience they can actually reach. DAU/MAU measures active engagement — specifically, the fraction of people who use the platform so regularly that it has become a daily habit. High DAU/MAU ratios indicate habit formation, which is more valuable to advertisers because it means consistent, reliable access to user attention rather than sporadic contact with an infrequently active user base. For investors, high DAU/MAU also suggests that future advertising revenue projections are more predictable.

Question 21

Explain the specific economic logic that connects the rise of programmatic advertising to the collapse of the U.S. newspaper industry. Why did advertising money leave newspapers for digital platforms?

Sample Answer: Programmatic advertising enabled advertisers to target specific audiences with measurable precision — they could reach exactly the demographics they wanted, measure exactly who saw and clicked on their ads, and pay only for verified impressions. Newspapers, by contrast, offered only rough demographic proxies (readers of a particular paper) with limited targeting and no meaningful measurement of whether ads were seen. Advertisers followed the measurability: why pay $10 CPM for a newspaper reader when you could pay $5 CPM and know exactly who saw the ad, when, on what device, and whether they subsequently visited your website? The structural advantage of digital targeting made newspaper advertising economically irrational for most advertisers, regardless of the quality or value of newspaper journalism.

Question 22

The chapter claims that the transition from click-through rate to time-on-platform as the dominant metric was not neutral — it changed what content got surfaced and rewarded. Explain why, and describe one specific consequence this shift might have for the type of content users encounter.

Sample Answer: When platforms optimized for CTR, content that generated curiosity and prompted action (headlines designed to be clicked) was rewarded. When platforms shifted to time-on-platform, content that held attention for extended periods was rewarded. Content that holds attention tends to be emotionally arousing — outrage, anxiety, excitement, or narrative suspense — because these emotional states are powerful attention-retaining mechanisms. One specific consequence is that emotionally polarizing political content tends to perform well under time-on-platform optimization: it generates strong emotional responses that keep users engaged and commenting, even though (or because) it is upsetting. Platforms optimizing for time-on-platform have an indirect incentive to surface more emotionally activating content, which may include content that is distressing or divisive.

Quiz scoring guide: Multiple choice = 2 points each (30 total); True/False = 3 points each (12 total); Short Answer = 8 points each (24 total). Total possible: 66 points. Score of 53+ (80%): strong chapter comprehension. Score of 46-52 (70-79%): adequate; review sections on CPM mechanics and behavioral surplus. Score below 46: re-read chapter with attention to sections 1.4, 1.5, 1.6, and 1.7.