1. How do you define opportunity cost? Why is it important in the calculation of economic profit of a firm? Can you give a real-life example of a business activity and its opportunity cost?

2. Can you provide at least one example of fixed and variable cost in your sample business activity? Why do you consider them as fixed and variable costs?

3. Research sample numerical or graphical models for the demand, revenue, marginal revenue, marginal cost, and average total cost of production for a firm. Determine the profit-maximizing output level of the firm in the table or graph. In no more than three sentences, explain why profits are maximized at this output level.