Alcohol Consumption: An Economic Problem

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Economic way of Thinking

Alcohol Consumption an Economic Problem
Economists assume consumers of alcohol are rational beings capable of responding to incentives and disincentives on decisions about its consumption ADDIN EN.CITE Gwartney2008465(Gwartney, Stroup, Sobel, & Macpherson, 2008)4654656Gwartney, J.D.Stroup, R.L.Sobel, R.S.Macpherson, D.A.Economics: Private and Public Choice2008United StatesSouth-Western Cengage Learning9780324580181 HYPERLINK l "_ENREF_2" o "Gwartney, 2008 #465" Gwartney, Stroup, Sobel, & Macpherson, 2008). An economist will formulate policy to guide in solving the problem of alcohol abuse reducing the benefits associated with alcohol consumption. The assumption of ceteris paribus (all things remaining constant) will be used to determine and influence individual choices surrounding consumption of alcohol. Marginal changes in the levels of alcohol consumption are evaluated against marginal changes in the factors influencing consumption of alcohol. An individual's choice to consume a unit of alcohol is evaluated against price and the income earned.
Economists make their conclusion and decision on the correct measure to take by assuming that, all things remaining constant, a rational individual will make an assessment of the benefits and losses associated with unit consumption of alcohol ADDIN EN.CITE Gwartney2008465(Gwartney et al., 2008)4654656Gwartney, J.D.Stroup, R.L.Sobel, R.S.Macpherson,
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