Question

Economists Henry Saffer of Kean University, Frank J. Chaloupka of the University of Illinois at Chicago, and Dhaval Dave of Bentley College estimated that the government must spend $4,170 on drug control to deter one person from using drugs and that the cost one drug user imposes on society is $897. Based on this information alone, should the government spend the money on drug control?a. Yes, since the marginal cost of drug control is less than the marginal benefit, the government should spend $4,170 to deter one person from using drugs.
b. No, since the marginal cost of drug control exceeds the marginal benefit, the government should not spend $4,170 to deter one person from using drugs.
c. No, since the marginal cost of drug control is less than the marginal benefit, the government should not spend $4,170 to deter one person from using drugs.
d. Yes, there are moral, ethical, and societal costs to allowing the propagation of drugs in our society.

Answer 1

Answer:

The answer is: B) No, since the marginal cost of drug control exceeds the marginal benefit, the government should not spend $4,170 to deter one person from using drugs.

Explanation:

There are two ways in analyzing this situation, economically the government shouldn't spend that much money to prevent someone from using drugs, the marginal costs are much larger than the marginal benefits ($4,170 ˃ $897).

But if you only use this type of analysis for government spending, why should the firefighters try to stop a fire? Many times it is much more expensive and risky to do it.