This assignment has six parts and involves both graphing and writing short answers. The assignment is an application of supply, demand, and elasticity. Be sure to explain each graph. In part six, you are asked for your opinion—be sure to explain why you feel that way (use answers from previous questions to strengthen your argument).
You can use Word and/or Excel to create one file and submit in Connect through the assignment page.
- Graph the market for an illegal drug and explain the shape of each curve. (4 points)
- List at least four ways the US govt. fights the “war on drugs” and identify each as either a supply-side or a demand-side strategy. (4 points)
- On a new graph, illustrate a large decrease in supply and explain the result in terms of market P and Q. (5 points)
- On a third graph, illustrate a small decrease in demand and explain the new result. (5 points)
- Based on Parts 3 and 4, which strategies—supply or demand—are more effective in decreasing quantities of illegal drugs that are exchanged in these markets? (4 points)
- If you were the head of the US Congressional Finance Committee, how would you allocate funds among these strategies and why? (8 points)