Consider a Wal-Mart Supercenter and a 7-Eleven Store

question 162

Multiple Choice

Consider a Wal-Mart supercenter and a 7-Eleven store.In the long run,

• A) Wal-Mart or 7-Eleven may have economies of scale depending on how many customers are served.
• B) Wal-Mart will definitely have lower average costs because supercenters serve many more customers.
• C) The 7-Eleven store will definitely have lower average costs because their small stores are cheaper to build.
• D) Wal-Mart's average total cost will decline faster than the 7-Eleven store and experience diseconomies of scale.
• E) The 7-Eleven store's average total cost will be lower than Wal-Mart's and always experience economies of scale.

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Definitions:

Deforestation

The removal of a forest or stand of trees where the land is thereafter converted to a non-forest use.

Economic Growth

An increase in a country's production of goods and services over a period, often measured by the rise in its Gross Domestic Product (GDP).

Environment

Refers to the natural world, including the air, water, and land in which people, plants, and animals live.

Tragedy of the Commons

This concept describes a situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources through collective action.