Question

Two strategies are used by the government in the “War on Drugs.” One is to offer free treatment without punishment to drug addicts who ask for help while at the same time punishing drug users who are caught with drugs. The other is to not target drug users, but to attempt to intercept drugs at the border and actively attempt to arrest drug dealers and suppliers. Street crime is positively influenced by the price of drugs (higher drug price = more street crime). Assume either strategy yields an equal reduction in the quantity of drugs consumed, and the government must do one strategy or the other (not both).

6a) [4 pts] Using well-labeled supply and demand curves, show the effect on drug price (and street crime) and quantity from the combination the treatment of drug addicts and jail time for drug users.

6b) [4 pts] Using well-labeled supply and demand curves, show the effect on drug price (and street crime) and quantity from increased interception of drugs at the border and targeting of drug dealers.

6c) [2 pts] Which strategy is likely to result in less street crime?

Answer 1