Principles of Economics Essay

1168 Words5 Pages
RUNNING HEAD: Principles Principles of Economics Sheena Swisher ECO 100 Professor: Dr. Cann-Tamakloe 8/14/2012 Principles of Economics Suggest how an economist would approach the problem of alcohol abuse. Provide two (2) possible solutions to this problem. Include the four (4) elements of the economic way of thinking in your analysis. The economy has a direct impact on the prices of goods; including alcohol. I think economists would approach the problem of alcohol abuse by considering the cost of alcohol and related excise taxes. One possible solution to the problem of alcohol abuse from an economic position would be increasing the cost of alcohol, liquor and wine. A connection has been identified with the higher the price of alcohol is; the less people will abuse it. (Economic Way of Thinking: Isolate Variables.) A blog post posted on the Washington Post website stated “For every 10 percent hike in minimum alcohol price, they found people drank 3.4 percent less alcohol. For certain drinks, the effect was even more pronounced: Increasing the minimum price of wine by 10 percent correlates with an 8.9 percent drop in consumption. Beer, however, appeared relatively resilient to price fluctuations, with a 10 percent bump lowering consumption a paltry 1.5 percent.” (Kliff, 2012.) I don’t think a marginal change would have the effect economists would hope for, so I think the price increase would need to be significant enough to meet the minimum of 10 percent as mentioned above. (Economic Way of Thinking: Think at the Margin.) A second possible solution to the problem of alcohol abuse from an economic position would be implementing restrictions on health insurance to limit coverage of services due to excessive alcohol consumption. Alcohol abusers are at risk for liver damage, brain damage, and cancer. If health professionals were able to identify, and treat

More about Principles of Economics Essay

Open Document