Use the Gary Becker criminal decision rule to answer the following 3 questions. Assume an individual with annual income of $100,000 (Yo) is considering committing a crime with a payoff of $20,000 (G). The individual has a 50% chance of getting caught (π) and if she does, she will get fined $10,000 (F).
What is the individual’s current utility?
Group of answer choices
$100,000
$5,000
$90,000
$10,000
Flag question: Question 12
Question 124 pts
The socially efficient production level occurs when the firm:
Group of answer choices
Produces product that consumers value more than the costs of production, and avoids producing product that consumers value less than the costs of production
Produces as little product as possible, regardless of consumers’ demand
Produces as much product as possible, regardless of consumers’ demand
Produces product that consumers value less than the costs of production, and avoids producing product that consumers value more than the costs of production
Flag question: Question 13
Question 134 pts
What is the individual’s expected utility from committing the crime?
Group of answer choices
$105,000
$80,000
$20,000
$120,000
Flag question: Question 14
Question 144 pts
Should the individual commit the crime? Why or why not?
Group of answer choices
No, because expected utility from committing the crime is less than current utility.
Yes, because expected utility from committing the crime is less than current utility.
Yes, because expected utility from committing the crime is greater than current utility.
No, because expected utility from committing the crime is greater than current utility.
