Question 1

Suppose that at the current level of crime control MSB = $350 whileMSC = $500. We know that:

Accepted Answer

When the Marginal Social Cost (MSC) of crime control is higher than the Marginal Social Benefit (MSB), it indicates that the resources spent on controlling crime are not yielding equivalent benefits. Therefore, the quantity of crime control should be decreased to balance the cost and benefit more effectively.

Question 2

Use the following diagram to answer the following questions.
 
-Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Accepted Answer

If a new drug, nirvana, were made illegal, we would expect the supply to change from S₁ to S₂, as it would become more difficult and risky to produce and distribute the drug.

Question 3

Use the following diagram to answer the following questions.
 
-Refer to Crime Control. If the quantity of crime control is currently represented by A₁, then:

Accepted Answer

At point A₁, the marginal social benefit of crime control is higher than the marginal social cost. Therefore, increasing crime control will lead to a net gain for society. Thus, the level of crime control should be increased.

Question 4

"Drug use is wrong because it is immoral and it is immoral because it enslaves the mind and destroys the soul. In this case, government has a responsibility for prohibiting the use of mid-altering drugs, regardless of whether drug-users are fully responsible and of the absence of involuntary harm to others." This is an example of:

Accepted Answer

The statement uses a morality-based argument, asserting that drug use is wrong due to its immoral nature and its negative impact on the mind and soul, justifying government intervention.

Question 5

If a new drug, crash, were made illegal there would likely be a large decrease in supply because:

Accepted Answer

When a drug is made illegal, there is a higher risk for suppliers to produce and distribute the drug due to lack of government-enforced property rights. The risk of being caught and punished increases, which decreases the supply of the drug. Option A is incorrect because the nonprice cost of the drug remains the same regardless of its legality. Option B is incorrect because smugglers and cartels can be affected by the same risks and costs associated with illegal drug production and distribution. Option D is irrelevant and not a significant factor in determining drug supply.

Question 6

Suppose the marginal social benefit of the last unit of crime control in Metropolis is $48,500 per year while the marginal social cost of the last unit of crime control is $35,000 per year. In this instance the city should:

Accepted Answer

The city should expand crime control as long as the marginal social benefit of the last unit of crime control (MSB) is greater than the marginal social cost of the last unit of crime control (MSC), which is the case here as MSB = $48,500 and MSC = $35,000. By expanding crime control, the city can increase social welfare (the sum of consumer and producer surplus) since the additional benefits of the last unit of crime control exceed its additional costs. Therefore, choice B is the best option.

Question 7

Suppose government were to legalize the use of cocaine. As a result of this action there is likely to be:

Accepted Answer

Legalizing cocaine could lead to a decrease in property crimes as the drug becomes more affordable, a decrease in organized crime due to the removal of the illegal market, and a reallocation of resources away from drug crime control as law enforcement priorities shift.

Question 8

Use the following diagram to answer the following questions.
 
-Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Accepted Answer

When a product becomes illegal, its supply decreases, and due to the demand for the product remaining constant, price increases. Therefore, we would expect the price of nirvana to increase to P₂.

Question 9

Suppose that at the current level of crime control MSB = $250 whileMSC = $200. We know that:

Accepted Answer

When MSB is greater than MSC, it means that the benefit of additional crime control measures is greater than the cost. Therefore, it is optimal to increase the quantity of crime control in order to maximize net benefit.

Question 10

Use the following diagram to answer the following questions.
 
-Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Accepted Answer

The answer of Use the following diagram to answer the...

Question 11

Suppose that prohibition causes the price of marijuana to increase from $5.00 per ounce to $40.00 per ounce. Which of the following is most likely responsible for this increase?

Accepted Answer

Prohibition causes a decrease in supply due to the increased risk associated with selling the drug. As a result, there are fewer suppliers in the market, which leads to an increase in price due to the scarcity of the good.

Question 12

Which of the following would likely result if the use of a new drug, "euphoria," were made illegal?

Accepted Answer

Making a drug illegal typically leads to a decrease in its supply as legal avenues for its production and distribution are shut down, making it harder and riskier for suppliers to operate.

Question 13

Suppose that at the current level of crime control MSB = $500 whileMSC = $500. We know that:

Accepted Answer

When MSB = MSC, the optimal level of crime control has been reached, meaning that the benefits gained from crime control are equal to the costs incurred. Therefore, there is no need to increase or decrease the quantity of crime control as it is currently at the efficient level.

Question 14

"Individuals do not always know their own best interest. We should keep drug prohibitions in force so that people do not harm themselves." This is an example of:

Accepted Answer

This statement reflects a paternalistic view, which is the belief that individuals should be restricted or controlled by the government for their own good. It assumes that individuals are not capable of making decisions that are in their own best interest, and therefore the government must intervene to protect them. This is often used as a justification for drug prohibitions and other forms of regulation.

Question 15

Your neighborhood association votes to institute a Neighborhood Watch program. You refuse to participate, but receive the benefit of this extra protection because you live in the neighborhood. Your behavior is an example of:

Accepted Answer

The behavior demonstrated in the scenario is an example of the free rider problem, where an individual benefits from a public good without contributing to its creation or maintenance. By refusing to participate in the Neighborhood Watch program but still receiving its protection, the person is taking advantage of the efforts of others without sharing in the costs.

Question 16

Use the following diagram to answer the following questions.
 
-Refer to Crime Control. If the quantity of crime control is currently represented by A₂, then:

Accepted Answer

The marginal social cost equals marginal social benefit, indicating that the current level of crime control is optimal and should remain the same.

Question 17

Use the following diagram to answer the following questions.
 
-Refer to Crime Control. The efficient level of crime control is:

Accepted Answer

The efficient level of crime control is where the marginal costs of crime control are equal to the marginal benefits of crime reduction. This occurs at point A₂. Any lower level of crime control would result in more crime than is socially desirable, and any higher level of crime control would have a cost greater than the benefits of additional crime reduction.

Question 18

Suppose the marginal benefit of employing an additional police officer in efforts to decrease marijuana abuse in Suburbia is $15,000 per year while the marginal cost is $35,500. In this instance the city should:

Accepted Answer

The city incurs a net loss of $20,500 because the marginal cost of hiring an additional officer ($35,500) exceeds the marginal benefit ($15,000) by $20,500.

Question 19

"Responsible individuals should have the right to engage in drug use as long as no substantial, involuntary harm is imposed on a third party." This is an example of:

Accepted Answer

This statement reflects the basic tenet of libertarianism, which asserts that individuals should have the right to act as they wish, as long as they do not harm others. This viewpoint is often used to justify the legalization of drugs, as it is seen as a personal choice that does not necessarily harm others.

Question 20

Use the following diagram to answer the following questions.
 
-Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Accepted Answer

If nirvana were made illegal, we would expect a decrease in the supply of nirvana, shifting the supply curve from S₂ to S₁. This would lead to an increase in the price of nirvana and a decrease in the quantity demanded, which would shift the demand curve from D₁ to D₂. Therefore, we would expect demand to change from D₁ to D₂.

Quiz 8: Crime and Drugs: a Modern Dilemma

Suppose that at the current level of crime control MSB = $350 whileMSC = $500. We know that:

Use the following diagram to answer the following questions. -Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Use the following diagram to answer the following questions. -Refer to Crime Control. If the quantity of crime control is currently represented by A₁, then:

If a new drug, crash, were made illegal there would likely be a large decrease in supply because:

Suppose the marginal social benefit of the last unit of crime control in Metropolis is $48,500 per year while the marginal social cost of the last unit of crime control is $35,000 per year. In this instance the city should:

Suppose government were to legalize the use of cocaine. As a result of this action there is likely to be:

Use the following diagram to answer the following questions. -Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Suppose that at the current level of crime control MSB = $250 whileMSC = $200. We know that:

Use the following diagram to answer the following questions. -Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect:

Suppose that prohibition causes the price of marijuana to increase from $5.00 per ounce to $40.00 per ounce. Which of the following is most likely responsible for this increase?

Which of the following would likely result if the use of a new drug, "euphoria," were made illegal?

Suppose that at the current level of crime control MSB = $500 whileMSC = $500. We know that:

"Individuals do not always know their own best interest. We should keep drug prohibitions in force so that people do not harm themselves." This is an example of:

Your neighborhood association votes to institute a Neighborhood Watch program. You refuse to participate, but receive the benefit of this extra protection because you live in the neighborhood. Your behavior is an example of:

Use the following diagram to answer the following questions. -Refer to Crime Control. If the quantity of crime control is currently represented by A₂, then:

Use the following diagram to answer the following questions. -Refer to Crime Control. The efficient level of crime control is:

Suppose the marginal benefit of employing an additional police officer in efforts to decrease marijuana abuse in Suburbia is $15,000 per year while the marginal cost is $35,500. In this instance the city should:

"Responsible individuals should have the right to engage in drug use as long as no substantial, involuntary harm is imposed on a third party." This is an example of:

Use the following diagram to answer the following questions. -Refer to Nirvana. Suppose a new drug, nirvana, were made illegal. We would expect: