​Figure 53

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-Suppose 50 loaves of bread are demanded at a particular price. If that price rises by 2 percent, the quantity demanded decreases to 49.5 loaves of bread. This implies that the:

A) demand is elastic.
B) demand is unit-elastic.
C) price elasticity of demand is equal to 2.
D) demand is inelastic.
E) income elasticity of demand is equal to 0.5.