Principles of Economics Essay

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Principles of Economics Since the early 1980s, a growing number of economists have examined the impact of the price of alcoholic beverages on alcohol consumption. Other studies have evaluated the effects of price on various outcomes related to alcohol consumption, including nonfatal and fatal motor vehicle crashes and other injuries, liver cirrhosis and other alcohol-related mortality, and violence and other crime. The prices of alcoholic beverages lead to reductions in drinking and heavy drinking as well as in the consequences of alcohol use and abuse. This conclusion concurs with a fundamental law of economics called the downward sloping demand curve, which states that as the price of a product rises, the quantity demanded of that product falls. Since the price of alcohol can be manipulated through excise tax policies, the findings regarding the relationship between alcohol price and alcohol consumption clearly are relevant for policymakers interested in reducing alcohol consumption and its adverse consequences. Indeed, Federal, State, and local governments have implemented many policies to combat alcohol abuse in the past two decades. Alcohol abuse and its related problems cost society many billions of dollars each year. Estimates of the economic costs of alcohol abuse attempt to assess in monetary terms the damage that results from the misuse of alcohol. These costs include expenditures on alcohol-related problems and opportunities that are lost because of alcohol. This Alcohol Alert addresses issues pertaining to estimates of the costs of alcohol abuse, focusing on the types of costs considered and on the various problems associated with their estimation. A second way economists approach the problem of alcohol abuse is by viewing the issue of health insurance and how insurance rates are directly related to the amount of alcohol consumed. Here, we can consider

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