1) What appears to determine whether or not a country will export drugs? How important are the costs of factors of production (e.g. land, climate)? What about the legal system in the importing country?

2) In "The Organization of Illegal Markets" Reuter predicts how illegality affects the relationship between entrepreneurs and five economic agents. How does Fuentes' Colombian entrepreneur reduce the organizational and transactions costs associated with dealing with these agents?

3) What do Caulkins and Reuter identify as the four primary categories of costs to drug suppliers, and how much does each category contribute to the consumer cost of street drugs

4) Draw a supply and demand graph of the street (user) market for drugs. How would your graph change after a police policy of increased, indiscriminate, arrests in open air drug markets? You can edit and post the example power point graphs - be sure to label the graphs, and explain each graph in words.

5) Draw a supply and demand graph of the street (user) market for drugs, where the demand curve represents a user's willingness-to-pay over this week. Next, draw a graph where the demand curve reflects a user's willingness-to-pay over the next year. Suppose that the state legislature doubled the recommended sentences for drug sales. According to your graphs, how would you expect drug prices and use to change in the short and long run? You can edit and post the example power point graphs - be sure to label the graphs, and explain each graph in words.