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What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? a) It goes down c) The amount that it goes down depends on salary of the police officer d) The amount if goes up depends on the salary of the police officer e) None of the above 14. b) It goes up

What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? a) It goes down c) The amount that it goes down depends on salary of the police officer d) The amount if goes up depends on the salary of the police officer e) None of the above 14. b) It goes up

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please help with question 14. Thank you.

Suppose that speeding imposes externalities on other people resulting in a social cost of $50. A town is considering hiring an extra police officer to give out speeding tickets. If we want to maximize social welfare (absent enforcement costs), which 13. of the following statements are true? (Assume risk neutral drivers.) If the probability of detection with the extra police officer is 10%, then a a) speeding ticket should cost $55. If the probability of detection with the extra police officer is 10%, then a b) speeding ticket should cost $500. If the probability of detection with the extra police officer is 100%, then no one c) will speed. If the probability of detection with the extra police officer is 90%, then a speeding ticket should cost $59 None of the above d) e) What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? 14. b) It goes up a) It goes down c) The amount that it goes down depends on salary of the police officer d) The amount if goes up depends on the salary of the police officer e) None of the above to00 000 nd there is a three
Transcribed Image Text:Suppose that speeding imposes externalities on other people resulting in a social cost of $50. A town is considering hiring an extra police officer to give out speeding tickets. If we want to maximize social welfare (absent enforcement costs), which 13. of the following statements are true? (Assume risk neutral drivers.) If the probability of detection with the extra police officer is 10%, then a a) speeding ticket should cost $55. If the probability of detection with the extra police officer is 10%, then a b) speeding ticket should cost $500. If the probability of detection with the extra police officer is 100%, then no one c) will speed. If the probability of detection with the extra police officer is 90%, then a speeding ticket should cost $59 None of the above d) e) What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? 14. b) It goes up a) It goes down c) The amount that it goes down depends on salary of the police officer d) The amount if goes up depends on the salary of the police officer e) None of the above to00 000 nd there is a three
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