2. Suppose the Harrisonburg city council is concerned about the increase in crime in the city. Crimes in H'burg are inefficient in the sense that it costs society $20,000 more than the benefits to the criminal. If an offender is caught, tried and convicted they are sent to jail. Assume that the total social cost of trial, conviction, and punishment is $150,000 per criminal caught. The council is considering hiring additional police officers dedicated to detecting crime. This change would increase the fraction of offenders who are caught from 20% to 30%. The city estimates that this will decrease the number of crimes from 2,000 a year to either 1,200 or 1,600 per year. For each case: 1,200 or 1,600: For each question, make sure you justify your work and provide a clear explanation. a. What happens to the social cost of crimes committed? b. What happens to the cost of trying, convicting, and punishing offenders? c. What is the most that the city should be willing to pay for the new police officers?

2. Suppose the Harrisonburg city council is concerned about the increase in crime in the city. Crimes in H'burg are inefficient in the sense that it costs society $20,000 more than the benefits to the criminal. If an offender is caught, tried and convicted they are sent to jail. Assume that the total social cost of trial, conviction, and punishment is $150,000 per criminal caught. The council is considering hiring additional police officers dedicated to detecting crime. This change would increase the fraction of offenders who are caught from 20% to 30%. The city estimates that this will decrease the number of crimes from 2,000 a year to either 1,200 or 1,600 per year. For each case: 1,200 or 1,600: For each question, make sure you justify your work and provide a clear explanation. a. What happens to the social cost of crimes committed? b. What happens to the cost of trying, convicting, and punishing offenders? c. What is the most that the city should be willing to pay for the new police officers?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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