An increase in the demand for green tea raises the price of green tea from $16 a pound to $20 a pound. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, what is the value of the price elasticity of supply?

In the above figure, if the price of pizza falls, the budget line

A) rotates outward and becomes steeper. B) shifts leftward and its slope does not change. C) shifts rightward and its slope does not change. D) rotates inward and becomes flatter.

We generally expect the price elasticity of supply to be

A) zero. B) negative. C) positive. D) between -1 and +1.