Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Assume that each criminal i has the following utility function ui=bO-fO^2 where O=number of crimes committed, b=per unit benefit associated with each crime, and f=per unit fine for each crime paid by the criminal if caught. Essentially O is the demand for crime while f is the price. Finally b>0.

a) What is the demand function and hence the demand curve for crime? (Hint: From the utility function we know that the marginal benefit of a crime to the criminal is b while the corresponding marginal cost is 2fO)

b) Suppose that f=cO captures the relationship between higher crime and corresponding increases to punishment. In other words, fines (f) set by the government increases as crime (O) increases and c>0. This function is essentially the "inverse supply function" with respect to crime. Given the demand and supply curves, express O and f in terms of b and c.

c) What is the equilibrium levels of O and f if b=c=1?

d) Suppose that an increase in crime (O) also results in a per unit amount of social damage equal to d(d>0). And assume that d=1. Is the resulting socially optimal amount of crime different from the privately optimal amount you obtained in (c)?why?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M942689

Have any Question? 


Related Questions in Microeconomics

Assignmentin the article at the beginning of the readings

Assignment In the article at the beginning of the readings book, Aronson talks about Social Psychology as a leap of faith, and about the imperfect nature of social psychological experiments (which is true of science in a ...

Goal construct a case studyresearch paper that examines a

Goal: Construct a case study/research paper that examines a firm in the U.S. from a microeconomic standpoint and provide suggestions based on your findings. Step 1: Choose a firm for your focus. In addition to picking a ...

Essay questionyour manager knows that you have completed a

Essay Question Your manager knows that you have completed a course in Purchasing and Materials Management. Your manager would like you to write an essay for your fellow workers about the key purchasing/ supply management ...

Microeconomics assignmentquestion 1 - read attachment

MICROECONOMICS ASSIGNMENT Question 1 - Read Attachment 1 Answer the following questions. Use diagrams where appropriate. [Assume that the Australian grape and wine industries are perfectly competitive markets]: Use deman ...

Assignmentquestion a daoism amp confucianism as fisher

Assignment Question A: DAOISM & CONFUCIANISM. As Fisher states in our textbook, "Individuals often harmonize the apparently opposite characteristics of Daoism and Confucianism in their own lives." In what specific ways m ...

Assignmentyou will submit your second comprehensive summary

Assignment You will submit your second comprehensive summary (4-5 pages) regarding your final progress report. If you are still in your original business, what lessons did you learn? If not, what went wrong? What improve ...

Problem setthis problem set is due on monday october 24th

Problem Set This problem set is due on Monday, October 24th in class. Consider the specific factors model (2 goods, 3 factors, where labor is the flexible factor) for a given small country with the following Cobb-Douglas ...

Short-run economic fluctuationsplease have by 800 pm west

Short-Run Economic Fluctuations Please have by 8:00 pm west coast time cailfornia time 12/13/2016. Plagrism free, orignal work, and refs. APA format double space. please ask questions right away please dont wait to the l ...

Question 1consider the market for a course of antibiotics

Question 1. Consider the market for a course of antibiotics. Suppose the supply of antibiotics follows P = 5 + 2Qs and the demand follows P = 20 - 2Q D . Here, Q represents antibiotics, denominated in millions of units. ...

Question 1 the agrizone corporation invests 140140 million

Question 1. The Agrizone Corporation invests $14.014.0 million in a new inventory tracking system. A. The opportunity cost of Agrizone's decision is the value of leaving the money unutilized. B. The opportunity cost of A ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen