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.
a. Use the model of supply and demand to show how each hypothesis could lead to an increase in the quantity of drugs consumed (you should draw two different graphs and analyze each hypothesis separately).
b. How could data collected on the price of drugs help us to distinguish between these two explanations?