Consider a Police Department Trying to Decide How to Allocate

question 61

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. What is the socially optimal number of detectives to be assigned to each type of crime?

• A)4 detectives to motor vehicle theft and 0 to burglary.
• B)3 detectives to motor vehicle theft and 1 to burglary.
• C)4 detectives to motor vehicle theft and 2 to burglary.
• D)0 detectives to motor vehicle theft and 4 to burglary.

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Definitions:

Conversion

The refusal to deliver up a chattel to its rightful owner by a bailee.

Liability

The state of being legally responsible for something, typically referring to the obligation to pay debts or damages.

Bailment

A legal relationship in which physical possession of personal property is transferred from one person to another with the understanding that the property will be returned.

Pay Stub

A document provided to an employee with each paycheck that details the wages earned for the pay period and the year-to-date, including taxes and other deductions.