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Assignment Sample Of Subject ECON 450 – Case Studies in Applied Economics

Suppose you approach the government takes to tackle the drug problem is launching educational campaigns to teach the youth about the detriments of using illicit drugs. Illustrate the impact of this policy in the market for illegal drugs using the demand and supply curves. Your diagram should have clearly labeled axes. Indicate whether the policy affected the demand or the supply curve. And indicate the market equilibrium before and after the government launched its educational campaign.

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Economics Assignment Sample

Q1:

Answer :

The impact of Educational campaigns:
The government's concentration on educational initiatives is intended to curb demand for illicit drugs, which has a direct impact on the demand side of the curve. This indicates that the demand curve will shift to the left (D1 to D2). At the same time, the supply curve (S1) will remain constant.

Now, after the teaching effort, demand will shift, resulting in a lower price and fewer medications sold.
Conclusion: Educational initiatives will diminish overall demand for the medicine. Consequently, the demand curve will shift to the left. The supply curve will remain the same. As a result, a lower equilibrium price will be obtained with a lower equilibrium quantity.

Q1: Consider your answer of above question. Will the government approach to the problem in question result in increase or decrease in the drug related crime?

Answer :

As stated in the previous solution, educational programs will diminish the demand for illicit drugs, resulting in lower consumption and lower prices.  With decreasing market demand, illicit drug consumers are more likely to spend less money on their narcotics.  

This reduction in the total financial burden on drug users will reduce their desire to engage in criminal behavior to fund their addictions. Reducing the number of drug users reduces overall drug spending.  As a result, the amount of money required by addicts to fund their addictions is lowered.To summarize, the government's approach to launching educational initiatives is likely to reduce drug-related crimes as economic pressure from drug users is alleviated.