INSTRUCTOR DISCUSSION NOTES:
Is Legalization and Prevention Better Than Getting Tough With Drugs?

1. Consider the program to exchange the dirty needles of heroin users for clean ones. What are the economic costs and benefits of implementing such a program?

Answers may vary, but the focus should be on the external costs of sharing dirty needles.

2. Indicate with a graph of supply and demand the impact of a return to a “get tough” approach to illicit drugs.

Supply should fall, as the level of risk associate with production of the drug increases.

3. What sorts of government programs will result in a reduction in demand for drugs like marijuana and cocaine?

Any sort of prevention program would suffice here; education, rehabilitation, etc.

Multiple Choice/True False Questions

1. The article summary indicates that the price of cocaine has decreased over time. This would be best attributed to
  1. A decrease in demand.
  2. An increase in demand.
  3. A decrease in supply.
  4. An increase in supply.
ANS. D

2. Reducing the criminality of cannabis should, all else constant, have the effect of
  1. Increasing supply
  2. Decreasing supply
  3. Increasing demand
  4. Decreasing demand
ANS. A

3. Allowing heroin users to exchange dirty needles for clean ones is an example of reducing ________ costs.
  1. Fixed
  2. External
  3. Sunk
  4. Internal
ANS. B

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