Alcohol abuse is a major problem in today’s society. With a down an economy, there are more and more people turning to alcohol while actually helping the local package store to thrive. Economist may see it differently. They may see it as a way; first they will “Use Assumptions to Simplify”. (O'Sullivan, A., Sheffrin, S. M., & Perez, S. J. (2012)) Why are these people drinking? Is it because they struggle and worry how they are going to pay their bills, or is they are stressed out. Next they must “Isolate Variables – Ceteris Paribus.” That is they must find out the relationship between two variables (O'Sullivan, A., Sheffrin, S. M., & Perez, S. J. (2012)) like the down economy and the loss of jobs, with the number of people abusing alcohol. The third element of economic way of thinking involves “Thinking at the Margin”. Economists have to think about slight changes in one variable to see the outcome of the decision. (O'Sullivan, A., Sheffrin, S. M., & Perez, S. J. (2012)) For instance, if the price of the alcohol tax was raised significantly would it lead to less people abusing alcohol, or will it lead to more crime and bootlegging back from yesteryear. Finally, economists need to think about the last element. “Rational People Respond to Incentives” Economist tends to think that most people act rationally and act in their own self-interest. (O'Sullivan, A., Sheffrin, S. M., & Perez, S. J. (2012)) There are two possible solutions to abuse of alcohol; one is to have the economy turned around and get people hired, while the next possible solution would be to offer rehab clinics at lower price to individuals.
Prescription drugs affect the supply and demand of other products and services in this country by way capitalism. When you are ailing from flu, you typically go to the...