​Figure 53

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-If a 10 percent increase in the price of gasoline results in a 2 percent decrease in the quantity demanded of gasoline, then the elasticity of demand for gasoline is:

A) equal to 0.2 and demand is inelastic.
B) equal to 0.2 and demand is elastic.
C) equal to 0.02 and demand is elastic.
D) equal to 0.5 and demand is inelastic.
E) equal to 0.5 and the demand is elastic.