Assignment 2: Costs and Profit (20 points)

In Section 2, you learned about costs and profit. Now, you'll apply what you learned.

1. Choose a real or made up example of a company, and describe at least three variable costs the company has. (1-3 sentences. 1.5 points)

2. Choose a real or made up example of a company, and describe at least three fixed costs the company has. (1-3 sentences. 1.5 points)

3. Is gross profit or net profit more important to consider when you're deciding how successful and profitable a company is? Why? Explain. (1-3 sentences. 2.0 points)

4. If you were running a company, describe at least two things you would do to improve its productivity. (1-4 sentences. 2.0 points)

5. Describe at least two advantages a large company has over a smaller company. (1-4 sentences. 2.0 points)

6. Choose a good you are familiar with, and analyze its economic utility, using the questions below. NOTE: Choose a good for this exercise, not a service.

a. What type of good did you choose? (1 sentence. 1.0 points)

b. Describe the form utility of the product you chose. What makes its form useful? Can you think of any improvements that could be made to its form utility? (1-3 sentences. 2.0 points)

c. Describe the place utility of the product. Can you think of any improvements that could be made to its place utility? (1-3 sentences. 2.0 points)

d. Describe the time utility of the product. Can it be improved at all? (1-3 sentences. 2.0 points)

e. Describe the possession utility of the product. Can it be improved at all? (1-3 sentences. 2.0 points)

f. Describe the information utility of the product. Can it be improved at all? (1-3 sentences. 2.0 points)