Practically, it is very hard to model actions since 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 or she 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 (Mantzavinos, 2001). Additionally, they will use cost benefit analysis by viewing the benefits accrued from stopping the habit of alcohol consumption which in this case out weight the disadvantages for example, wastage of money in purchasing alcohol (O'sullivan et al, 2011). More so, 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 and the price that alcohol come with. When the supply is not sufficient, they would prefer to stop drinking alcohol rather than continuing with the habit of looking for a commodity that is scarce and costly. More so, they will consider the level at which alcohol is demanded; therefore, they will 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. Friends and family members can help make the abuser realize that drinking is affecting them by being specific in their discussion. In this manner, the abuser may be willing to look for assistance when they are faced with the harm their alcohol consumption causes to others. With the help of friends and family members, the abuser is likely to overcome the problem of alcohol drinking. Other groups such as Alcoholic anonymous help the abusers by giving the patients the chance to assist each other to avoid alcohol consumption. 2. Analyze how prescription drugs affect the demand and supply of other products and services in this country. Prescription drugs have direct inclination to the trends of supply and demand of goods and services in a particular state (Porter, 1998). The sectors that are most likely to be affected include; the beneficiaries which in this case are the patients, private insurers and to the extreme public policies. These effects are generally predisposed and become inevitable because of the rise in costs of these prescription drugs. Rise in costs of prescribed drugs connotes that the beneficiaries have to go an extra mile to settle their health bills. This may include outsourcing finances that were initially allocated for a different purpose. Cutting down allocations from a different sector in order to fill the health gap translates to low purchasing power from the deprived sectors. 3. Formulate a reason why the elasticity of demand is an important consideration when analyzing the impact of a shift in supply and why the elasticity of supply is an important consideration when analyzing the impact of a shift in demand. Include at least one (1) example in each scenario. Price elasticity of demand attempts to measure how price change affects the quantity demanded by the prevailing market condition. The formulae for determining the price elasticity is as shown below. Price elasticity (PEoD) = (percentage change in Quantity demanded)/ (percentage chang
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…
You own a local sub shop in a college town. You primarily serve two groups of people: local residents (both students and other local residents) and visitors to your town. Devise a price discrimination strategy that will increase your revenues compared to a single-pricing strategy.
220). Their dominance is evident through their control over prices of the goods or services they provide and the barriers that they set to make it difficult for new firms to join their industry. This “fewness” results to firms be mutually interdependent because each has to consider the possible reactions of its competitors to its price, marketing and product innovations or development.
In the past, people used to indulge themselves in such practices without having the basics on the principles of economics. As a result, economic development was not achieved which necessitated the improvement in the approach to the operation of business by individuals as well as institution.
The fists solution to economists is to have the price of alcohol increased. From the theory of demand, an increase in price would lead to a decrease in the quantity of a commodity demanded. To increase the price of alcohol, economists would formulate policies that increase the excise tax charged on the alcohol.
Economists’ way of approaching this problem would be trying to establish costs brought about by alcoholism. The second approach would be trying to understand all costs involved into alcohol consumption. This is because alcoholism costs cannot be measured directly since a dollar cannot be easily placed on any loss of production.
The economy is continually growing at a rate of 1.8 percent annually (World Factbook, 2013). The country is currently on its way to recovery from a recession although the present situation is better than it was in 2007 and 2008. The unemployment rate to date is estimated to be 9 percent which is high as compared to the recent past (World Factbook, 2013).
Economics also focuses on money - how it is made, lost, used and misused. Adam Smith was considered to be one of the first one's to study the historical development of industry and commerce in Europe. His 'Inquiry into the Nature and Causes of the Wealth of Nations' was one of the earliest attempts to study the economics part.
sales) of the produced good and the opportunity cost of that good. A choice is non-improvable if the direct reward is higher than the opportunity cost. There is an equilibrium between these two.The PPC is a very useful diagram as it can be used to demonstrate many economic concepts such as opportunity costs, Pareto efficiency, comparative advantage and the law of increasing costs (Rodda, 2005)
Economics is the field of study that deals with such activities as coming up with goods, distributing and usage of the goods. It involves how one uses the resources in the environment, which have a characteristic of being scarce. Individuals or a household have to utilize the scarce resources available in the economy.
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