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You have been employed as a Consultant Economist by the NT Government in particular the NT Police and NT Health Departments. You have been asked to advise about the affects of a) an increase in the police crackdown on illicit drugs in the NT and b) using government revenue to better educate the NT population about the serious health problems related to illicit drug use and to greatly increase the penalties for illicit drug use. Assume that the demand for illicit drugs is very inelastic. Also briefly comment on how the use of extra state and federal police resources diverted to the issue of illicit drugs would effect the government.

The question is based on material in the Text. Text material which may be relevant to the question may be drawn primarily from any of Text chapters 3,4,5 and 6. See text "Reading Between The Lines: Why a crackdown on illicit Drugs Increases Crime".


The question addresses the following learning outcomes:
• be able to apply demand and supply analysis to make a range of market related decisions



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