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ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
Edition 6ISBN: 978-1133150558ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
Edition 6ISBN: 978-1133150558 Exercise 7
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?
• 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?
Explanation
Verified
Verified
a)Reduced police efforts:
A reduced pol...
ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
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