In question 3, when you say it depends how far apart we assume A and B are on the network, does that mean we can assign a distance within that network for how far apart the two are?
If we can assign a distance (in bits), do we then just factor in the speed of the ethernet and the size of the packet? I think i'm on the right track, but I am not sure if we can assign an arbitrary distance between the two stations...

You can assume that the distance between A and B is anywhere from next to each other (essentially 0) to at opposite ends of the network (1KM apart). Given these possibilities, you are to figure out which actual locations of A and B (and timing of their transmissions) would result in the highest and lowest transmission efficiency in the situation described (one collision followed by success).

Tom