Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States?
a. The price of cocaine and the quantity imported will both increase.
b. The price of cocaine is likely increase and the quantity entering the country decrease.
c. The price of marijuana, a cocaine substitute grown domestically, will fall.
d. The policy will have the least impact on those individuals whose demand for drugs is elastic.
e. Demand for drugs is highly inelastic and these policies have little or no effect on consumption.
B
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Suppose that Canada can produce 15 units of timber or 3 units of grain. Suppose that Mexico can produce 6 units of timber or 2 units of grain. Which of the following is CORRECT?
A) Mexico has a comparative advantage in grain production. B) Mexico has an absolute advantage in timber production. C) Canada has a comparative advantage in grain production. D) The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.
Industrial policies have not been effective in encouraging investment in clean energy
Indicate whether the statement is true or false