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 5 percent and the number of employed workers falls by 12 percent?

A) 0.42
B) 1.60
C) 2.40
D) 6.00
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 |-0.12/0.05| = 2.40.