Answer to Question #33469 in Microeconomics for sammi
a) What is the demand function and hence the demand curve for crime? (Hint: From the utility function we know that the marginal benefit of a crime to the criminal is b while the corresponding marginal cost is 2fO)
b) Suppose that f=cO captures the relationship between higher crime and corresponding increases to punishment. In other words, fines (f) set by the government increases as crime (O) increases and c>0. This function is essentially the "inverse supply function" with respect to crime. Given the demand and supply curves, express O and f in terms of b and c.
c) What is the equilibrium levels of O and f if b=c=1?
Unfortunately, your question requires a lot of work and cannot be done for free.
Submit it with all requirements as an assignment to our control panel and we'll assist you.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!