Learning with drugs

and which do you think the moralistic and scrupulous drug dealer would choose out of those 2 possibilities?

Well, is that the point? Afterall, dealer might be a good person. :P

There's not much space for morality in economics IMO.

I know people who trade in substances of an illegal nature who are actually pretty decent people but they're in that line of business for money, not because they feel a moral duty to alter peoples states of conciousness.

I know. I was trying to say that if I had that in my exam I would answer that there is those two options. Though I do believe it is pretty obvious which one the dealer will choose.

Hehe, I like it. :P

The answer is actually b) See revenue decrease.

Ceteris Paribus, if demand is inelastic and supply falls, then revenue will fall.

jim, i can recommend reading mankiw (it's about the only economics book i ever read through fully). it's written in a quite interesting way, i especially like the little stories about where money came from etc. why do german books about economics always have to be written in such a complicated way? in my opinion we should all stick to the american kind of teaching books, they are so amusing and easy to read :P

I hardly think thats an achievement, since you are infact Finnish.