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.

Question

Quizplus · Accepted Answer

The elasticity of resource demand will be 0.63. This is calculated by taking the absolute value of the percentage change in quantity of workers (-5%) and dividing it by the percentage change in resource price (8%), which gives a result of 0.63.

What Will the Elasticity of Resource Demand Be If Unit