Question

1. True or False. An elasticity is a general tool for assessing the percentage change in one variable with respect to a related variable.

Answer 1

True

If we talk in the simple terms then elasticity shows the relationship of percentage change of one variable with respect to another variable

The variable can have different points

The best example of this is price elasticity of demand which shows the relationship between two type of variables

Here the the two types of variables are price and quantity demanded

Another Example for this is income elasticity of demand which shows the relationship between two variables which are income and quantity demanded