Four Stores Have a Problem with Theft and Security Is

question 35

Multiple Choice

Four stores have a problem with theft and security is a public good.Let S stand for the number of person-hours of security patrols per week.The marginal benefit of security patrols to each of the stores is given by the formula MB = 200 - 2S.Patrols cost $20 per hour.What is the socially efficient level of security?

• A) 90 person-hours of patrols per week
• B) 100 person-hours of patrols per week
• C) 92.5 person-hours of patrols per week
• D) 97.5 person-hours of patrols per week

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Definitions:

Intuition

An unconscious process of making decisions based on imagination and possibilities.

Intuition

A process of understanding or knowing something immediately, based on a person's feelings rather than facts or evidence.

Anchoring

A cognitive bias where an individual relies too heavily on an initial piece of information (the "anchor") when making decisions.

Satisficing

A decision-making strategy that entails choosing an option that meets a minimum standard of satisfaction or acceptability, rather than pursuing the best possible outcome.