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The price of drink – is it connected with binge drinking?

In real terms the price of alcohol has been gradually falling, but to what extent might this have been a factor in rising levels of binge drinking in the UK? The link below is to an extract from the BBC Radio 4 Today Programme and will require real player installed on your computer to listen to it.

The price of alcohol and binge drinking BBC Today Programme(January 2008)

Questions

  1. What are principal determinants of demand for alcohol?
  2. Assess the relative importance of price against the other determinants of demand for alcohol.
  3. What are the principal factors that determine the price elasticity of demand for alcohol? Assess the extent to which an increase in the price of alcohol will lead to a fall in spending on alcohol.
  4. How effective would a rise in the tax on alcohol be in raising revenue for the government?
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