Situation 32-1 Suppose That the Equation That Represents the Expected Benefits of Benefits

question 58

Multiple Choice

Situation 32-1
Suppose that the equation that represents the expected benefits of burglary for a given prospective criminal is as follows:
​
EB = P_s x Loot
The criminal's cost equation is as follows:
EC = [P_p x (I + F) ] + AC
Where:
EB is the expected benefits of burglary
P_s is the probability of successfully burglarizing a house
Loot is the dollar take from the burglary
EC is the expected costs of burglary
P_p is the probability of imprisonment
I is the income the criminal gives up if caught and imprisoned
F is the dollar value the criminal puts on freedom
AC is the anguish cost of committing a burglary
​
​
-Refer to Situation 32-1. If the prospective criminal sets the following values: ​
P_s = 50 percent
Loot = $30,000
P_p = 10 percent
I = $10,000
F = $25,000
AC = $5,000
​
The prospective criminal's expected benefit from committing the burglary is ______________ and his expected cost of committing the burglary is _______________. Economic theory tells us that under these circumstances, the prospective criminal ______________ commit the burglary.

• A)$15,000; $8,500; will
• B)$15,000; $8,500; will not
• C)$15,000; $40,000; will not
• D)$17,500; $12,000; will

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