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Assignment example - Principles of Economics
Finance & Accounting
Pages 3 (753 words)
Principles of economics Your name Institution Principles of economics 1. 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…
Extract of sample
Practically, it is very hard to model actions there are so many distinct variables. The problem of alcohol abuse is not easily overcome because alcohol is highly addictive. In this case, if the alcohol abuser is an economist, he will consider many things that he or she would use to help him or her overcome the situation. They will look at the opportunity cost whereby they will consider buying those goods that are best for their health other than alcohol. In addition, they will use cost benefit analysis by viewing the benefits accrued from stopping the habit of alcohol consumption which out weight the disadvantages for example wastage of money in purchasing alcohol (O'sullivan et al, 2011). Furthermore, they will consider rational behavior by assuming which actions are necessary when they stop consuming alcohol. Lastly, an economist would look at the market forces of demand and supply of alcohol in that they will analyze the level at which alcohol is supplied to the market. When the supply is not sufficient, they would prefer to stop drinking alcohol. On the other hand, they will consider the level at which alcohol is demanded and analyze the possible outcomes of many people drinking alcohol. The possible way to help alcohol abuser is to assist them to realize that they have alcohol consumption problem. ...
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