course material

1. economics most cost efficient companies
Homework #2; Total 10 point if you complete all five questions. Q1, 2, 3, 4, 5 have each 2
points. Your answer to the homework has to be more than five (5) sentences for each
question based on researched facts and logical analysis to earn the full credit.Q 1) (2
points)Make a distinction of the price elasticity of demand, in terms of elastic, unitary and
inelastic.Price elasticity of demand describes the responsiveness of a good to a change in
it’s price by percentage. In elastic demand, if price rise, then decrease in total revenue or
if a price falls it increases total revenue. The quantity demanded percentage is greater than
the percentage representing price change.Q 2) (2 points)Explain the law of diminishing
marginal utility & the law of diminishing return in terms of definition and cause.Q 3) (2
points)Suppose a liquor store has to pay $1 of sales tax over a six-pack of Beer.If the main
customers of the liquor store are perfect price elastic, who pay $1 of sales tax between the
liquor store and the main customers? why?If the main customers of the liquor store are
perfect price inelastic, who pay $1 of sales tax between the liquor store and the main
customers? why?Q 4) (2 points)Describe the shape of AFC (average fixed cost),
AVC(Average Variable cost), ATC(Average total cost) and MC(Marginal cost) Explain graphic
relationship among ATC, AVC and MC.Q 5) (2 points)Is Accounting profit smaller than
Economic profit? If yes, why? If not, why not? Define Accounting profit and economic
profit.PART 2The most cost efficient companyOver the years, GE(General Electrics) was
respected as one of the most admired company in America under the leadership by Mr. Jack
Welch. One time Dell and Wal-mart tried to take over the prestigious status and got set
back. Fortune: America’s most Admired companies 2019(Top 10) AppleLinks to an external
site.Amazon.comBirshire HathawayDisneyStarbucks Links to an external
site.MicrosoftAlphabetNetflix JPMorgan ChaseFedExQ1)In your opinion, which corporation
is the most cost efficient, best managed, and most admired company in America nowadays?
GE, Proctor Gamble, Johnson & Johnson ,Dell ,Wal-mart or some other , lately Apple? why?
(0.5 point)In my opinion, I think Apple is the most admired companies not only in America
but globally. Q2) One time mighty companies such as IBM, or GM etc have been declining in
their powerful status. What lesson can we learn from those cases?Do you think the
leadership of Mary Barra(GM CEO) with vision of focusing on electric car and self driving
car can revive old glory of GM?(0.5 point)Q3) Is the main reason of company failure due to
leadership failure? Or Is it due to complacency problem, fear for change ,lack of hungry
spirit, bureaucratic red tape, big is ugly, diseconomy scale or lack of micro management, a
failure to adapt to changing technology? or you name it. (0.5 point)Q4) what are your ideas

2. to keep a world class company such as APPLE or etc. stay at top with continuous success in
expanding market share, cost cutting efficiency or prosperous profits? possibly new
creative leadership, thinking outside of box, without fear of change, maintaining a hungry
spirit to be better? Give your own idea. (0.5 point)Q5) which one company is the best one
you wish to invest for next 3 decades, based on its management, product or business model,
financial condition(with low debt), consistent past and potential earning? (0.5 point)