While going to the grocery store it's not unusual to find stray shopping carts littering the...

While going to the grocery store it's not unusual to find stray shopping carts littering the parking lot. Shoppers may think that a parking spot is open, only to find that it's actually being used by a shopping cart. It seems like a basic courtesy to others: you get a cart at the grocery store, you use it to get your groceries and bring them to your vehicle, and then you return it for others to use. And yet, it's not uncommon for many people to leave their carts haphazardly in the parking lot.

To combat the problem, grocery stores have cart receptacles throughout the parking lot. What general economic concept(s) are grocery stores employing? Choose ALL that are correct.

A. Grocery stores are decreasing the marginal cost of returning the carts by shortening the time and effort required to return a cart.
B. Grocery stores are increasing the marginal benefit of returning the carts by shortening the time and effort required to return a cart.
C. Grocery stores are providing a positive incentive for shoppers to return the carts by shortening the time and effort required to return a cart.
D. Grocery stores are providing a negative incentive for shoppers to return the carts by shortening the time and effort required to return a cart.
E. Grocery stores are decreasing the opportunity cost of returning the carts by shortening the time and effort required to return a cart.

As another potential solution to the problem, grocery stores rely on a cart "rental" system where you pay for the cart and are reimbursed when it's returned; e.g., inserting a quarter. What general economic concept(s) are grocery stores employing? Choose ALL that are correct.

A. Grocery stores are decreasing the marginal cost of returning the carts by making it more expensive for failure to return a cart.
B. Grocery stores are increasing the marginal benefit of returning the carts by making it more expensive for failure to return a cart.
C. Grocery stores are providing a positive incentive for shoppers to return the carts by making it more expensive for failure to return a cart.
D. Grocery stores are providing a negative incentive for shoppers to return the carts by making it more expensive for failure to return a cart.
E. Grocery stores are decreasing the opportunity cost of returning the carts by making it more expensive for failure to return a cart.

Solutions

Expert Solution

A and C for the first part

Here in the above question, the time taken to return cart is their cost..
So by making a receptable available in parking

It is one one hand reducing marginal cost and on the other it is providing convinence so POSITIVE INCENTIVE

B and D for the 2nd part of the question

Negative incentive in form of penalty or forfeiture of deposit..

And
Increase marginal benefit if they ll return cart

Rahul Sunny answered 1 year ago

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