A

persistent problem facing the US society is the use of illegal drugs, such as heroin,

cocaine. The U.S. government devotes billions of dollars each year to reducing the

flow of drugs into the country (i.e. drug interdiction). There are two main purposes:

(1) to reduce drug use; (2) to reduce robbery and other violent crimes committed by

drug addicts to obtain the money needed to support their habit. Let's use the tools of

supply and demand to examine this policy of drug interdiction.

a.

What happens to the mar

ket of illegal drugs after a drug interdiction

?

b.

Suppose that the demand of drug addicts for illegal drugs is inelastic. How

would the drug interdiction affect the total expenditure on drugs?

c.

How do you evaluate drug interdiction as a policy to achieve the

two

purposes.

d.

Some people argue drug interdiction can be (more) successful in the longer

run. Why?

e.

Rather than trying to reduce the supply of drugs, policymakers might try to

reduce the demand by pursuing a policy of drug education. How do you

evaluate

drug education as a policy to achieve the two purposes?