QUESTION 1. Your first assignment is to stand at the front of the Save-On Foods Store in your local neighbourhood, and to pick 8 shoppers at random as they enter the store. Your job is to follow them around the store, and examine their buying choices. Your day begins at 9 am, and you follow your first shopper into the store. This shopper is female. You note that she might be there for a while, since she has selected a wheeled shopping cart for her purchases. You take careful note of her purchases. At the checkout, you notice that she has selected the usual array of products from all departments of the store: 1. Please identify 4 of those items that she has selected, and provide some theory for the reasons why she has actually selected that particular item. For example, she may have selected hamburger, not steak. She may have selected the four pack of paper towels, not the two pack. Some of the items that she has chosen have brand names. Some are "no name" brands. So, you can imagine these are like some of the assumptions that I would like you to make. Please do so for 4 such items that in your example, she has selected, and provide a basis from economic theory that explains her selection 2. You notice that she has coupons for some of the items that she has selected. Please explain at least two economic theories of the coupon. If it helps you to think about this question, you might want to consider that Save-On Foods might be in a competitive industry but once you are in the store, they think about you as a customer differently, where there is some monopoly power available to the Pattison group 3. You notice over the course of your summer data gathering that all of the Save On Food Stores are located in shopping Centers. None of them are in stand alone outlets. Does this signify some kind of industry formation? Please explain. Also, you notice that there are "sales" prices for a different group of products every week, and that tends to influence the buying choices of customers. If Pattison wants to stay in business for the long term, what must he ensure about his cost and pricing structures in order to do so? If this industry is really competitive, then why aren't there a lot of changes in the industry participants over time? Or are there? What's the difference? 4. The Save-On Foods store parking lot is relatively empty, as is the store, on your first day at work. It is 9 am on Monday. Later in the day, and later on during the first week, you also check the usage of the parking lot. It tends to get more used later in the day, and later in the week - do you have some suggestions to Mr. Pattison about the implications of the use of the parking lot to improve his business interests? If you do, what are they? Please remember, what you are suggesting must be supported by valid economic theory - which, of course, you will point out to him
