The answer is D. Mitty would rather dream than attend to errands. He's not literally shooting a pistol, so B and C are not the answer. A. can't really be proved with this passage, also he specifies what biscuit he wants.
Answer: an abandoned mental hospital
Drug abuse: increasing awareness on negative effects of drug abuse, and also ignorance.
Joblessness: Government poor policies, and retrenchments that leave many jobless.
Poor parenting: Young adults brought up in broken homes, and young adults from orphanages.