A survey shows an increase in drug use by young people. In the ensuing debate, two hypotheses

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A survey shows an increase in drug use by young people. In the ensuing debate, two hypotheses are proposed:

• Reduced police efforts have increased the availability of drugs on the street.

• Cutbacks in education efforts have decreased awareness of the dangers of drug addiction.

a. Use supply-and-demand diagrams to show how each of these hypotheses could lead to an increase in quantity of drugs consumed.

b. How could information on what has happened to the price of drugs help us to distinguish between these explanations?


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Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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