Consider a Police Department Trying to Decide How to Allocate

question 23

Multiple Choice

Consider a police department trying to decide how to allocate its crime prevention resources between motor vehicle thefts and burglaries. The marginal benefit of one less motor vehicle theft is $20,000, and the marginal benefit of one less burglary is $1,000. Suppose the annual number of motor vehicle thefts and the annual number of burglaries depends on the number of detectives assigned to each type of crime, as shown in the table below. Each detective costs $35,000 each per year, regardless of whether the detective is assigned to motor vehicle thefts or burglaries. The marginal benefit of the fourth detective assigned to burglaries is ______ per year.

• A)$10,000
• B)$0
• C)$200,000
• D)$20,000

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Definitions:

Ratio Analysis

A quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing line items on financial statements.