When Wal-Mart Decides to Build a New Retail Store in a Town

question 248

Multiple Choice

When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit. What other motive would Wal-Mart have for choosing to build a large store?

• A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would.
• B) A larger store will give Wal-Mart greater political influence in the community.
• C) A larger store may deter entry into the town by a rival firm.
• D) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store.

---

Definitions:

Fatigue

A state of physical or mental weariness resulting from exertion, often leading to reduced efficiency or productivity.

Working Memory Capacity

refers to the ability of an individual to hold and process a limited amount of information in the mind, where it can be used for cognitive tasks such as learning, reasoning, and comprehension.

Intelligence Test Scores

Quantitative measures obtained from assessments designed to evaluate intellectual capabilities and potential.

Correlation

A measure of the relationship between two variables, indicating how one may predict or relate to the other.