You're right that number is three is vague. That's deliberate. Candidates are allowed to ask questions for clarification and, if they haven't worked in a given environment (Web development, for example), then the vagueness allows them to not be tied to domain specific issues. Your's is exactly the sort of answer I was looking for: does the applicant know enough to break things out into different tiers?
And while your answer for number two (in response to merlyn) was correct, it's less easy to immediately understand. I prefer very clear code, though you definitely would have passed the test :)
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