8/2/2019 Spring 2012_ECO401_1.pdf

1/3

SEMESTER SPRING 2012

Economics (ECO401)

Assignment No. 1Due Date: 12th April, 2012 Marks: 20

The Case:

Pakistan is facing a persistent problem of illegal use of drugs such as heroine, cocaine andcrack. According to the annual report of United Nations Office on drug and crime, Pakistansannual heroine market is worth $1.2 billion. More than 90% of the worlds opium which isused for the production of alcohol and heroine is produced in neighboring countryAfghanistan and distributed to Pakistan, Iran and other countries. Pakistan is one of the mainsuppliers 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 thatdrug addiction can destroy the lives of drug users and their families. Another is that drugaddicts often turn to robbery and other violent crimes to obtain the money needed to fulfilltheir habit. Several steps have been taken by the Government of Pakistan to minimize theuse of drugs.

Requirement:

Part A:Following steps have been taken by the government to minimize the use of drugs. Identifythe 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 relatedcrimes in Pakistan in short run and long run?

(Marks: A = 5+5+5, B = 5)

8/2/2019 Spring 2012_ECO401_1.pdf

2/3

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/vuandalso use other reference books.

For planning your semester activities in an organized manner, you are advised to viewschedule of upcoming Assignments, Quizzes and GDBs in the overview tab of thecourse website on VULMS.

Graphs are very important in Economics course. This assignment will enhance your skillof drawing graphs. A complete procedure of How to draw graphs in MS-Word isuploaded on announcement page of LMS. Get help from that uploaded file to solve yourassignment.

Corrigendum related to lecture # 2, 3, 5, 6 and 7 have been uploaded on LMS in theannouncement section. Read these corrigenda attentively before solving assignment.

Draw diagrams by yourself. Do NOT copy from any source. NO need to write irrelevantmaterial. Properly label the diagrams where required. Labeling also containsmarks.

Note:

Only in the case of Assignment, 24 hours extra / grace periodafter the duedate is usually available to overcome uploading difficulties which may be facedby the students on last date. This extra time should only be used to meet theemergencies 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 assignmentwill be accepted through e-mail once the solution has been uploaded by theinstructor.

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

8/2/2019 Spring 2012_ECO401_1.pdf

3/3

assignment.

Give the answer according to question. For acquiring the relevant knowledge dont rely only on handouts but watch the

video lectures and use other reference books also.

Rules for MarkingPlease 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