A baker supplies 200 cupcakes when the price of cupcakes is $4.50, but supplies 280 when the price rises to $7.50. Using the

midpoint formula, her elasticity of supply is equal to:

options:

	1/2
	1/3
	2/3
	1

If the demand curve for a certain good is perfectly inelastic, what will be the effect on an increase in price on the quantity demanded?

options:

	Increase the quantity demanded
	Leave the quantity demanded unchanged
	Decrease the quantity demanded
	Cannot be determined from the information given

The ________effect states that the larger the output, the greater the quantity of output over which fixed cost is divided into, leading to a lower average fixed cost.

options:

	spreading
	long-run
	diminishing returns
	increasing returns

David's current salary is $20,000. He has two job offers from company X and company Y. The accounting and economic profit for David for taking each of these jobs compared to his current job are given below. What should David do?

Job Economic Profit Accounting Profit

X -$2000 $25,000

Y $1000 $22,000

options:

	Switch to either Job X or Job Y as both are equally good
	Switch to Job X
	Stay in his current job
	Switch to Job Y

Jesse operates an indie movie theatre in Ottawa. He sells 80 tickets per movie screening at the current ticket price and the market is in equilibrium. Jesse wants to open another theater in Toronto, where incomes are 20% higher than in Ottawa. Assuming that the income elasticity of demand for indie movies is 0.8 and that Jesse charges the same admission price in both cities, how many tickets will he be able to sell in his Toronto theater?

options:

	22% less
	20% more
	22% more
	16% more