Question

4. We have studied several ways in which elasticity is measured in economics. The concept can be used to study other relationships between two things—along as each is measurable and they affect one another.. The importance is that elasticity allows us to put a number on the relative way in which one thing affects the other. Is it a positive effect? How strong is that effect?

Think of two things you know about in your life. It could be from your work life, your hobbies, or your home life. Just please don’t use anything that involves prices or the example of your grades and study time as we used in class.

How would you measure elasticity between these two things? Be specific about the units used. Would you expect the elasticity to be positive or negative? Why? Will the elasticity be greater or less than 1 (or -1)? Why?

Answer 1

Offcourse elasticity is not only the concept of economics but elsewhere too. There are so many concepts in economics which are applicable in general life like law of diminising returns. It is applicable everywhere. Anythings which i s contioniuos in use may may the fall in in its utility after a certain period. Same with the concept of elasticity is applicable everywhere in life.

First of all we have to understand the meaning of elasticity very clearly. It is the degree of responce by one variable in terms of another variable.This may be anything which changes over a period of time.Therefore elasticity measures the degree of responce of one variable in terms of another variable.

Now these degree of responces may be varied from no responce, less responce, equal responce, high responce to infinite responce. Therefore these degrees of responce are of basically five types. Ranges from 0,less than 1, equal to 1, more than one and infinite. Now the question is can the value of elasticity be -1 or less than zero. The answer is offcourse not. value be alway from 0 to infinite. But if i say the elasticity is -6 , what does it mean .The value is only 6 but this minus sign is an indication of negative relationship between two vaiables, It means both of these variables are moving in opposite directions. If the value is + 9 it means that both of the vaiables are moving in the same direction.Therefore minus sign is nothing but an indication or positive or negative relationship bewteen two variables.

Concept of elasticity is very very important for everyone, whether it is consumer, producer, government , polict makers and so on. As it measures the degree of responce it is helpful to see the nature of two variables. HOw they are corelated. It may be for knowing that which commodity iismore sensitive for price and accordingly governemnt can decide the price of the commodity.

But as we mention earlier that this concept is apllicable everywhere. Lets take an example from a real life.

Take an example of recent Corona outbreak. Thousands and thousands of people are dyiing throughout the world and US is the biggest sufferer. Is there the correaltion of two vaiables whether positive or negative in this aspects. The answer is offcourse yes. For example is the social distancing helpful to reduce this pandemic . HOw more the social distancing will result less the number of corona cases? This responce is negative in this sence that elasticity is negative. Two variables are negative more the social distancing lesser the number of cases. Now this degree may vary like no social diostancing menas heighest number of cases and so on.

Is there any corrlation in terms of degree of responce for ageing and corona infection. Yes there is a positive degree of responce for this . More the age more the chanches of getting infected from this disease.

In this way the concept of elasticity is apllicable everywehre in life and thats why it is important.