What Will the Elasticity of Resource Demand Be If Unit

Multiple Choice

What will the elasticity of resource demand be if unit wages rise by 8 percent and the number of employed workers falls by 5 percent?

A) 0.63
B) 1.60
C) 2.90
D) 4.00
Elasticity of resource demand is the absolute value of the percentage change in quantity of workers divided by the percentage change in resource price.In this case,elasticity is |0.05/-0.08| =0.63.