Principles of Economics Research Paper Example | Topics and Well Written Essays - 1000 words

Principles of Economics - Research Paper ExampleBased on this research economic science is about scarcity and choice. It is assumed that all human beings are rational thinkers hence would always submit to consume products that would give them maximum satisf workion or utility. Mankiw argues that rational people systematically and purposefully do the best to achieve objectives given available opportunity. Given a choice among alternatives and with scarce resources, virtuoso would judge the benefits and costs of consuming an extra unit of a product and would only take a closing only if marginal benefit is greater than marginal cost. In this case, to solve the alcoholic drink abuse problem, one has to consider marginal benefits and marginal costs derived from consuming an extra unit of alcohol and since excessive drunkenness has more costs than benefits, one would refrain from alcohol. The opportunity cost foregone by choosing to abuse alcohol is too high compared to satisfaction derived money spent on alcohol can do some other things such as feeding the family, education for children, and investments among others. Besides, the person may have health problems therefore adding to the costs. By considering all these factors, a rational person would refrain from alcohol abuse. Heyne acknowledges the role played by incentives in directing behavior. For him, rational people usually respond to incentives or are induced to act by them. Assuming alcohol abusers are rational, imposing taxes on alcohol substances would eliminate the problem. This would fol number 1 the rightfulness of have which states that other things being constant, if the price of a good increment, the quantity demanded of the good decreases. Taxes have the fix of increasing alcohol prices and this would automatically mean that the abusers would desist from alcohol consumption or cut their consumption. prescription care for Drug Effects on Demand and Supply of Other Products and Services P rescription drugs are drugs plus by a medical officer to a patient and are regulated by canon unlike the over-the-counter drugs which can be old to anyone. If a patient is under prescription drugs, he/she buys the drugs despite the price of the drugs. An profit or decrease in price of the drugs therefore has little or no effect on the quantity demanded by an individual (McCarthy & Schafermeyer, 2007). The drugs are provided by the National wellness Insurance and have no close substitutes. The increase in price of the drugs thus affects all the sectors of healthcare industry such as patients and private insurers. Due to increased costs, the private insurers are forced to increase the cost of their services in case they have to offer such drugs and this may lead to low demand for their services. The patients are also required to get medical prescriptions before obtaining the drugs thus the demand for the medicine may be low compared to over-the-counter drugs. Use of prescription d rugs also has an effect on demand for other healthcare services such as hospitalization. The prescription drugs also affect translate of generic wine products as manufacturers have patents to supply the new drugs for some years. Elasticity of Demand and Supply The price crack of demanded which is percentage change in quantity demanded over percentage change in price shows consumers responsiveness to price changes. (McKenzie & Lee, 2006). It is an important consideration when analyzing the impact of a shift in supply and in ascertain if the firm should raise or lower its price. The supply curve is upward sloping showing a positive relationship between price and quantity supplied other things held constant. However, in long-run, those factors do change do a shift in supply curve. Such factors include input prices, technology, expectations and number of sellers in the market. For example, an increase in input prices such as labor would lead to a decrease in supply thus shifting th e supply curve to the left. This