A retail consultant studies local Walmart stores to try to assess customer satisfaction with the shopping experience. She begins by examining the ACSI scores for retailers. In the late 2000s, Walmart instituted a policy of increasing the width of the aisles and decreasing the amount of floor space containing huge product displays. Management believes that this was a bad move because when consumers see less, they buy less. Managers argue that the best operating policy is “piling high and selling cheap!” Put as much product on the sales floor as possible and price them as low as possible. This policy is supported by keeping distribution costs low. In addition, management believes that labor costs must be kept low to maintain profitability. The local Walmart is worried about losing business to smaller local supermarkets and dollar stores. In response, Walmart is growing through Neighborhood Walmart stores that are smaller in size and located in densely populated areas rather than suburbs.

1. What is this case about? Why is this significant?

2. Design a survey with 6 questions that would measure beliefs and attitudes Walmart and a competing dollar store.

Ann’s only income is her annual college scholarship, which she spends exclusively on gallons of ice cream and books. Last year when ice cream cost $10 and used books cost $20, Ann spent her $250 scholarship on five gallons of ice cream and ten books. This year, the price of ice cream rose to $15 and the price of books increased to $25. So that Ann can afford the same bundle of ice cream and books that she bought last year, her college raised her scholarship to $325. Ann has the usual-shaped indifference curves. Will Ann change the amount of ice cream and books that she buys this year? If so, explain how and why. Will Ann be better off, as well off, or worse off this year than last year? Why?