Question

In: Economics

The government of the city of Dayton, Ohio in the U.S.A. wants to fight crime related...

The government of the city of Dayton, Ohio in the U.S.A. wants to fight crime related to illegal drug use. Users often turn to crime to finance their drug habit. The city government asks you as an economic consultant to compare two policy interventions. Interdiction, which is aimed at disrupting delivery of drugs, and education, which aims at informing users about the danger of illicit drug use. Assume that the total value of drug related crime equals the total expenditure on drugs. Which policy do you recommend to Dayton’s policymakers, if you assume that demand for illegal drugs is inelastic due to addiction? Justify your answer rigorously. Illustrate your answer graphically.

Solutions

Expert Solution

There are two policies that are available:

(i) Disrupting delivery of drugs

(ii) Educating consumers of drugs about the ill-effects of drug consumption

Here, assuming that the demand for illegal drugs is inelastic because of the addiction.

In view of the data given, I would recommend educating buyers about the evil impacts of consuming drugs. It is given that when consumers won't be able to finance their drugs prerequisites, then they indulge in wrongdoings. Thus, subsequent to breaking down this circumstance, educating purchasers is the best arrangement. Education will assist customers with understanding the risky impacts of drugs on the wellbeing and progressively in the wake of getting mindful, they will decrease the utilization. At the point when consumer will settle on their own, that they don't need drugs any longer, they won't indulge in wrongdoings. Since it is given that the demand for drugs is inelastic, in this way, educating customer and making them demand less drugs is the main solution for the issue.

While, if government disrupt the supply of drugs, individuals will lose control and may indulge in wrongdoings.

In the following figure, x-axis represents the quantity of drugs and y-axis represents the price of drugs. When the consumers become more educated about the evil impacts of drugs, then as a result the demand for drugs falls. This will lead to shift the demand curve of drugs leftwards from DD to DD'.


Related Solutions

The government of the city of Dayton, Ohio in the U.S.A. wantsto fight crime related...
The government of the city of Dayton, Ohio in the U.S.A. wants to fight crime related to illegal drug use. Users often turn to crime to finance their drug habit. The city government asks you as an economic consultant to compare two policy interventions. Interdiction, which is aimed at disrupting delivery of drugs, and education, which aims at informing users about the danger of illicit drug use. Assume that the total value of drug related crime equals the total expenditure...
1. Vinnie is looking for an apartment in Dayton, Ohio. In Dayton, 75% of the two...
1. Vinnie is looking for an apartment in Dayton, Ohio. In Dayton, 75% of the two bedroom, one bath apartments are $800 a month and 25% are $400. The marginal cost of his search is $15 per search, i.e., the marginal cost of looking at the first apartment is $15, the marginal cost of looking at the second apartment is $30, and so on. Suppose that Vinnie discovers that the distribution of high price - low price apartments is not...
The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the...
The City of Gotham used to be crime-ridden. Since the city government cooperated with Batman, the crime rate has dropped dramatically. Suppose people in general likes low crime rates, although the crime rate is irrelevant for a firm’s productivity. Further, assume that Gotham specializes in industries that DO NOT benefit from agglomeration. As the crime rate declines, Suppose all residents of Gotham full time and each resident rents an apartment. The wage rate for each worker reduces by 1,000 dollars...
The Air Force will begin operating a 24-hour-a-day shipping distribution center in Dayton Ohio. The distribution...
The Air Force will begin operating a 24-hour-a-day shipping distribution center in Dayton Ohio. The distribution center plans to employ workers during six “shifts” throughout a 24-hour period. The minimum required number of employees for each shift is provided in the table below. All employees will work two, and only two, consecutive shifts per 24-hour period; each shift is four hours long. Assume that each employee will work the same two shifts every day. All employees are paid at the...
Assuming the government of Ghana is selling a government bond to fight COVID-19, and at the...
Assuming the government of Ghana is selling a government bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked corporate bond be over-subscribed at the expense of the government bond. Explore all possible scenarios.( not more than one-page). B) Based on the functions of the banking system, give reasons why governments bail out banks during economic crises? C)Is the World heading for a...
According to the reading by Louisie Shelley, "The Globalization of Crime", how is crime related to...
According to the reading by Louisie Shelley, "The Globalization of Crime", how is crime related to globalization? What is one point that you disagree with the author in her explanation of "globalization of crime"? Why do you disagree with them? Explain briefly.
Assuming the government is selling a government bond to fight COVID-19, and at the same time,...
Assuming the government is selling a government bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked corporate bond be oversubscribed at the expense of the government bond. Explore all possible scenarios.
Assuming the government is selling a government bond to fight COVID-19, and at the same time,...
Assuming the government is selling a government bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked corporate bond be oversubscribed at the expense of the government bond. Explore all possible scenarios. [Not more than one-page]
Assuming the government is selling a government bond to fight COVID-19, and at the same time,...
Assuming the government is selling a government bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked corporate bond be oversubscribed at the expense of the government bond. Explore all possible scenarios.
Assuming the government is selling a government bond to fight COVID-19, and at the same time,...
Assuming the government is selling a government bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked corporate bond be oversubscribed at the expense of the government bond. Explore all possible scenarios
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT