Economics Semester Exam

Question

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Question
How do consumer cooperatives increase consumption capabilities and purchasing power of members?(1 point)
Responses

Consumer cooperatives offer loans to their members at better rates, which then allows the members greater access to financial resources to increase their consumption and purchasing power.
Consumer cooperatives offer loans to their members at better rates, which then allows the members greater access to financial resources to increase their consumption and purchasing power.

Consumer cooperatives are capable of generating a profit which can then be distributed to their members, thus providing members with additional income to increase their consumption capabilities and purchasing power.
Consumer cooperatives are capable of generating a profit which can then be distributed to their members, thus providing members with additional income to increase their consumption capabilities and purchasing power.

Consumer cooperatives put their money together to purchase good in bulk which brings down the cost per unit, allowing them to buy more than they would on their own.
Consumer cooperatives put their money together to purchase good in bulk which brings down the cost per unit, allowing them to buy more than they would on their own.

The 501(c)(3) tax code allows consumer cooperatives to receive discounts on their purchases of goods.

Answer 1

Consumer cooperatives increase the consumption capabilities and purchasing power of their members primarily by pooling resources together to purchase goods in bulk, which lowers the cost per unit. This allows members to buy more than they could individually. Therefore, the correct response is:

Consumer cooperatives put their money together to purchase goods in bulk, which brings down the cost per unit, allowing them to buy more than they would on their own.