Calculate elasticity of demand when a 60% increase in the price of rice causes the amount of rice you buy to fall by 120%

The correct answer is A.

The formula for calculating the elasticity of demand is:

$E_d = \frac{\%\ change\ in\ quantity\ demanded}{\%\ change\ in\ price}$

In this case, the percentage change in the price is 60%, and the percentage change in the quantity demanded is 120%. So, the elasticity of demand is:

$E_d = \frac{120\%}{60\%} = 2$

This means that the demand for rice is elastic, because a small change in the price causes a large change in the quantity demanded.

Option B is incorrect because the elasticity of demand is not 4. Option C is incorrect because the elasticity of demand is not 6. Option D is incorrect because the elasticity of demand is not 8.