Exam #2 Essays

Exam #2 Essays - Romana S Hai Micro Economics 002 Essays...

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Unformatted text preview: Romana S. Hai Micro Economics 002 Essays Submitted: 2. Debate over legalization of addictive drugs 3 . Consumer sovereignty 2. Debate over legalization of addictive drugs (chapter 20) 2a. Speculate on the reasons why the price of heroin (an illegal drug) is so high. The laws in the United States make the use of heroin illegal. If these laws were not in place, the use of heroin would be more probable and the cost would not be so high. If heroin became legal then the price of the drug would drop significantly. The United States laws limit the supply of heroin in order to keep people healthy and strong. Without the establishment of these laws, people would buy, use, and become strongly addicted to heroin. Having heroin is considered a rarity, so to have heroin available to the public, this leads to the prices skyrocketing. 2b. Speculate on why demand for illegal drugs such as heroin remains high despite the high price. The demand for illegal drugs such as heroin and cocaine reminds high despite the high prices because of the affect it has on people. Drugs are highly addictive and drugs usually become a necessity in a person’s life. When a drug becomes a necessity the demand for it increases. If the demand for a drug increases, this gives the drug dealer the power to raise prices to make a larger profit. Since drugs are so addictive and they becomes essential to a person, they are willing to pay whatever the price may be, in order to get the drug...
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This note was uploaded on 03/17/2008 for the course ECON 002 taught by Professor Mcleod,markpehlivan,ayseozg during the Fall '08 term at Penn State.

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Exam #2 Essays - Romana S Hai Micro Economics 002 Essays...

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