Discussion Board

(Drug Market) A survey shows an increase in drug use by young people. In the ensuing debate, two hypotheses are proposed: (1) reduced police efforts have increased the availability of drugs on the streets and (2) cutbacks in education efforts have decreased awareness of the dangers of drug addiction. Use the model of supply and demand to show how each hypothesis could lead to an increase in the quantity of drugs consumed. Suppose you collect data on what has happened to the price of drugs trades – how could this information help us distinguish between the two hypotheses?