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SEMESTER SPRING 2012
Economics (ECO401)
Assignment No. 1
Due Date: 12th April, 2012 Marks: 20
The Case:
Pakistan is facing a persistent problem of illegal use of drugs such as heroine, cocaine and
crack. According to the annual report of United Nations Office on drug and crime, Pakistan’s
annual heroine market is worth $1.2 billion. More than 90% of the world’s opium which is
used for the production of alcohol and heroine is produced in neighboring country
Afghanistan and distributed to Pakistan, Iran and other countries. Pakistan is one of the main
suppliers of heroine to the whole world. According to government sources, 600,000 people
enter into drug abuse in Pakistan annually. Drug use has several adverse effects. One is that
drug addiction can destroy the lives of drug users and their families. Another is that drug
addicts often turn to robbery and other violent crimes to obtain the money needed to fulfill
their habit. Several steps have been taken by the Government of Pakistan to minimize the
use of drugs.
Requirement:
Part A:
Following steps have been taken by the government to minimize the use of drugs. Identify
the effect of each step on demand curve of drugs, supply curve of drugs, equilibrium price
and equilibrium quantity of drugs with the help of diagram.
a. Government imposes ban on some drugs from entering the country.
b. Government introduces awareness programs to educate the general public about the
harmful effects of drug usage.
c. Government hires new anti-narcotics officers to fight against the usage of drugs.
Part B:
Being an economist, elaborate the impact of supply side policies on prevailing drug related
crimes in Pakistan in short run and long run?
(Marks: A = 5+5+5, B = 5)
Instructions:
Please read the following instructions carefully before preparing the assignment solution:
For acquiring the relevant knowledge, do not rely only on handouts but watch the
course video lectures, which can be downloaded for free from www.youtube.com/vu and
also use other reference books.
For planning your semester activities in an organized manner, you are advised to view
schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the
course website on VULMS.
Graphs are very important in Economics course. This assignment will enhance your skill
of drawing graphs. A complete procedure of “How to draw graphs in MS-Word” is
uploaded on announcement page of LMS. Get help from that uploaded file to solve your
assignment.
Corrigendum related to lecture # 2, 3, 5, 6 and 7 have been uploaded on LMS in the
announcement section. Read these corrigenda attentively before solving assignment.
Draw diagrams by yourself. Do NOT copy from any source. NO need to write irrelevant
material. Properly label the diagrams where required. Labeling also contains
marks.
Note:
Only in the case of Assignment, 24 hours extra / grace period after the due
date is usually available to overcome uploading difficulties which may be faced
by the students on last date. This extra time should only be used to meet the
emergencies and above mentioned due dates should always be treated as final
to avoid any inconvenience.
Important Instructions:
Please read the following instructions carefully before attempting the assignment solution.
Deadline:
· Make sure that you upload the solution file before the due date. No assignment
will be accepted through e-mail once the solution has been uploaded by the
instructor.
Formatting guidelines:
· Use the font style “Times New Roman”/ “Arial” and font size “12”.
· It is advised to compose your document in MS-Word 2003.
· Use black and blue font colors only.
Solution guidelines:
· Every student will work individually and has to write in the form of an analytical
assignment.
· Give the answer according to question.
· For acquiring the relevant knowledge don’t rely only on handouts but watch the
video lectures and use other reference books also.
Rules for Marking
Please note that your assignment will not be graded or graded as Zero (0) if:
· It has been submitted after due date
· The file you uploaded does not open or is corrupt
· It is in any format other than .doc (MS. Word)
· It is cheated or copied from other students, internet, books, journals etc…
eco 401 solution April 2012
