Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 32, Problem 6QP
To determine
Determine the observations that are inconsistent with the cost-benefit theory of burglary.
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The realization that only a small portion of criminals commit the majority of crimes suggests that, as you devote more resources to the criminal justice system, the
Multiple Choice
A. total cost always decreases.
B. total benefit quickly decreases.
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Billy John Pigskin of Mule Shoe, Texas, has a von Neumann-Morgenstern utility function of the form u(c) = √c. Billy John also weighs about 300 pounds and can outrun jackrabbits and pizza delivery trucks. Billy John is beginning his senior year of college football. If he is not seriously injured, he will receive a $1,000,000 contract for playing professional football. If an injury ends his football career, he will receive a $10,000 contract as a refuse removal facilitator in his home town. There is a 10% chance that Billy John will be injured badly enough to end his career.
If Billy John pays $p for an insurance policy that would give him $1,000,000 if he suffered a career-ending injury while in college, then he would be sure to have an income of $1,000,000 − p no matter what happened to him. Write an equation that can be solved to find the largest price that Billy John would be willing to pay for such an insurance policy.
Here is my question:
Why is Billy's income 1,000,000 - p even…
Chapter 32 Solutions
Economics (MindTap Course List)
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- Corruption: Group of answer choices Is more costly to society if it is centralized (comes from the top down). Is inefficient but does not deter innovation and change. Results in higher prices and lower output when it is combined with theft. Results in lower prices and higher output when it is combined with theft..arrow_forwardRoger and Michelle like going out and enjoy each others’ company, but have different taste in entertainment. Michelle would like to go to a professional basketball game, while Roger prefers opera. If they fail to agree to go together to either the game or to the opera this Saturday night they will stay at home and be miserable. Both will be worse off than if they had gone together to either the game or the opera. (a) Construct a pay-off matrix for this game. (You can make up your own numbers for this problem; just make sure the numbers correctly depict the given situation.) (b) Find two Nash equilibria for this game. Explain why they are indeed Nash equilibria.arrow_forwardWhy is the government sometimes a part of the problem of coordination failure rather than the solution? Does this make the problem hopeless? What could be done in this case?arrow_forward
- Most people do not steal because: the marginal utilities of stolen goods diminish as more of them are obtained. the marginal utilities of stolen goods are negative. their marginal costs, including guilt costs, are too high. stolen goods can be sold only at deep discounts.arrow_forwardIs it okay for a company to take a utilitarian approach and use deception or lies about their product if it is for the greater good? Why or why not? Provide a rationale, example, or evidence for your answer.arrow_forwardIs the death penalty a deterrent to murder? One way to answer is to compare homicide rates in U.S. states that have the death penalty to rates in similar states that don’t have the death penalty (during the same time period). What do studies of this type show? no effect a small deterrent effect a medium-sized deterrent effect a backfire effectarrow_forward
- The opportunity cost of holding money: Group of answer choices is zero because money is not an economic resource varies directly with the interest rate varies inversely with the level of economic activity varies inversely with the interest ratearrow_forwardIn “An Inquiry into the Nature and Causes of the Wealth of Nations” published in 1776, Adam Smith wrote: “Nothing is more useful than water: but it will purchase scarcely anything… A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it” Use your own words and be sure to support your statements with logic and arguments.arrow_forwardWhen Alicia looses $100 reacts much stronger than when she finds a $100 bill. This is referred to as______________________. normal rational behavior shortage loss aversionarrow_forward
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