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Wal-Mart Context Rich Problems

Brian Peterson, Central College
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This material was originally created for Starting Point: Teaching Economics
and is replicated here as part of the SERC Pedagogic Service.


In this example, students are asked to research the effects of Wal-Mart on small town economies, relate those effects to their own town, and draw a conclusion based on those effects. Students will construct an argument suggesting that Wal-Mart is a positive or negative influence on a local economy, and be able to support that with evidence.

Learning Goals

By the end of this assignment, students should be able to:
1. Understand some of the principal arguments both for and against Wal-Mart; and
2. Articulate and argument and draw a conclusion based on those arguments.

Context for Use

This exercise has been used in a Principles of Microecnomics course when discussing cost/benefit analysis toward the end of the term. Students should be familiar with basic notions of profit maximization, cost structures, labor markets, and consumer/producer surplus. At the same time, this exercise would be appropriate in a number of courses, as students in upper-level courses could be expected to provide more sophisticated arguments.

Description and Teaching Materials

As an economic consultant, you have been asked by your local mayor and the City Council to provide your perspective on the impact of the new Wal-Mart SuperCenter slated to open in your town next year; this store will replace the current Wal-Mart (not a SuperCenter) on the east side of town. The prevailing belief in town is that Wal-Mart destroys all small businesses in the area when it opens a new SuperCenter, and that this new venture spells the end of the shops on the town square. There are some, however, who suggest that the addition of Wal-Mart to the local community will provide new jobs and additional economic growth.

The mayor is overwhelmed by the existing literature on the effect of Wal-Mart in a local economy, and is seeking your guidance not only on what needs to be evaluated in reaching a decision about Wal-Mart, but also in deciding whether Wal-Mart should stay in town. He has asked for a 2 – 3 page (maximum) bulleted memo in which you identify the major issues associated with Wal-Mart and its effect on your local economy – both good and bad – and draw your professional conclusion.

Wal-Mart Context-Rich Problem Word Document (Microsoft Word 26kB Apr27 09)

Wal-Mart CRP Grading Rubric (Microsoft Word 2007 (.docx) 12kB May28 09)

Teaching Notes and Tips

Students should be made aware that they will need to do some research on the effects of Wal-Mart on local economies. They may need guidance with appropriate methods of citation. If you encourage them, students will make the most of this, and will create their own letterhead for their consultancy firm. Students should also be reminded that they are to provide both sides of the argument, and then draw a specific conclusion based on those arguments.


Students will be assessed on the following:
1. Inclusion of multiple reasons for each side of the argument;
2. depth of analysis of each side of the argument; and
3. ability to draw a specific conclusion based on the arguments provided.

References and Resources

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