1. When the price of milk was $2.00 and then it rose by $0.20, the quantity supplied increased from 100 gallons to 120 gallons.

Calculate the price elasticity of supply using the midpoint formula.Indicate whether it is inelastic, unit, or elastic.

2.Jane and Sam own a snackette which sells pizza and hamburger.They are trying to determine who should do what activity.The table below shows the number of pizzas and hamburgers each person can make per day.

Units of Pizzas per Day Units of Hamburgers per Day

Jane 50 100

Sam 30 90

a.What is Jane's opportunity cost of making pizza?

b.What is Sam's opportunity cost of making hamburger?

c.Who has absolute advantage in making hamburgers and pizzas?