Historical events can be great real world examples of price elasticity. For example, the dramatic increase in gas prices in the United States during the 1970s significantly reduced demand and was well documented in economic research. On the other hand, there is ample economic data suggesting that increases in the price of cigarettes through various excise taxes has not historically impacted overall demand significantly.
A fun way to help attach practical significance to the concept of price elasticity is to pre-select a collection of common goods and services and have students attempt to guess the elasticities of the various items. There are various sources in economic research that provide empirically supported price elasticities that can be used.
While students may be more or less accurate on the price elasticities of many items, they might find some surprising. Use this as an opportunity to encourage discussion as to why the item has a particularly high or low price elasticity, citing relevant factors and economic principles. Even when price elasticities are not necessarily surprising, it can be enlightening to discuss the reasons.
To help visually illustrate the concept of price elasticity, have students graph the price elasticity of some selected items. Using price on the vertical axis and quantity on the horizontal axis, chart the demand for an item at various prices and connect the observations with a line. The relative steepness of the slopes of the lines created for various goods and services will help demonstrate visually how their demand changes with price.