Thursday, March 16, 2006

Legalizing Drugs

So, as Jonathon asked...

Why are drugs good for the economy?

What would happen if they were legalized?

This is actually a good micro question, and I'm pretty sure I have a reading on it for later in the unit. Think through the S & D of it - if drugs were legalized, what would happen to the price and why?

Or anything else that Jon thought would be good to discuss. :)

6 comments:

The Amazing O-clam said...

All right, If drugs were free trade and legalized, the economy would be in heaven. The incredible demand for drugs is inelastic. More people would want to do drugs because its alright to do it, no worries, thus increasing demand even further, but eventually, in the long run, the demand would plummet, as everyone would start to kill themselves off

forsnic said...

i agree with malco for the most part. so as malco said the demand would inc. in the short run. however, the supply would take a while to increase because after a while everyone would start growing their own bec hey its legal! the price of drugs would go down because people could make more of it without having to worry about getting caught.

helen said...

i think the price would initially drop, helping the QD to skyrocket, but the government would start taxing drugs heavily (cigarettes, anyone?), and due to their inelasticity, most of the tax would be paid by the consumers

KM said...

Why would suppliers be upset if drugs were legalized?

amepham said...

Suppliers would be upset b/c if it is legalized then more ppl will be supplying it causing their QD to go down and they would have more competition for customers and would most likely have to lower price.

KM said...

Alyssa, you rock. There are more suppliers protesting the legalization of drugs than people who want to use them. Crazy, hey?

Probably one reason why it won't happen. Not that suppliers step forward and say that, but hey...people are killed for much less than someone trying to sell drugs in someone else's territory...