Remember that this a macroeconomics course – your answers must come from the economics we’ve studied.

(Drug Market) A survey shows an increase in drug use by young people. In the ensuing debate, two hypotheses are proposed: (1) reduced police efforts have increased the availability of drugs on the streets and (2) cutbacks in education efforts have decreased awareness of the dangers of drug addiction. Use the model of supply and demand in the illegal drugs market to show how each hypothesis could lead to an increase in the quantity of drugs consumed. How could information on what has happened to the the price of drugs help us to distinguish between these two explanations?