QUESTION 342 points Save AnswerSuppose there are two potential criminal offenders: Charlie and Dan....

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QUESTION 342 points Save AnswerSuppose there are two potential criminal offenders: Charlie and Dan. Charlie and Dan have different levels of wealth, but the same opportunity cost of serving prison time. In particular, Charlie has a wealth of $5,000 and incurs a cost of $1,000 per month spent in prison. Dan has a wealth of $7,000, but also incurs a cost of $1,000 per month spent in prison. Suppose that optimal deterrence of a particular crime requires setting the expected punishment equal to $2,000. Assume that the probability of apprehension is fixed at 0.2.a. In order to achieve optimal deterrence at the lowest cost, what combination of fine (t) and prison term (t) (in months) should Charlie face? f = t=b. In order to achieve optimal deterrence at the lowest cost, what combination of fine (t) and prison term (t) (in months) should Dan face? f = t=,c. Suppose considerations of fairness dictate that the prison term facing Charlie and Dan must be the same. What fixed fine and prison term must be imposed on the two offenders to maintain optimal deterrence? f = , t = Is this policy efficient? (Enter "Yes" or "No")

David · Accepted Answer

Question 1 
a) Yes 
b) No, Yes 
c) $160 
d) No, No
Question 2  
a) $500 
b) $750 
c) No  
d) $5200
Question 3 
a) F = $2000, t=23 
b) F= $2000, t= 33 
c) F = $2000, t=33, No

QUESTION 3 42 points Save Answer Suppose there are two potential criminal offenders: Charlie and Dan. Charlie and Dan have different levels of wealth, but the same opportunity cost of serving prison...

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