Eco 100 Assignment 1

833 Words4 Pages
Principles Of Economics
Strayer University
ECON 100
March 12th 2012

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 It is a real case of negative externalities both in consumption and production. production of alcohol causes pollution too. The two possible solutions suggested by economists are: Coase theorem-They can negotiate by themselves for compensation without any government intervention if the property rights are secured and the cost of negotiation is not high. Pigouvian- taxes or regulations. Drunk driving is included.
An economist would increase cost through added
…show more content…
How does the alcohol abuse hurt me and what are my costs if I am not the abuser. We will pay for this in taxes and service. (TerrmPaperWarehouse.com, 2012) Analyze how prescription drugs affect the demand and supply of other products and services in this country. The rise in costs of prescription medicines affects all sectors of the health care industry, including private insurers, public programs, and patients. Spending on prescription drugs continues to be an important health care concern, particularly in light of rising pharmaceutical costs, the aging population, and increased use of costly specialty drugs. In recent history, increases in prescription drug costs have outpaced other categories of health care spending, rising rapidly throughout the latter half of the 1990s and early 2000s. (Kaiseredu.org, 2012).
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.
For example, the tax incidences will change based on both the elasticity of demand and supply. The consumer has to

More about Eco 100 Assignment 1

Get Access