Myra drives a Honda Accord, the most stolen car in the United States. She can take precautions to prevent her car from being stolen. The marginal benefit and marginal cost of these actions are MB = 10 - 0.2A and MC = 2 + 0.6A, where A is the number of precautions. Myra values her car, a 1994 model, at $2,400.
a. Graph Myra's MB and MC curves and show the optimal number of precautions.
b. Suppose that Myra adds comprehensive coverage to her car insurance, which will reimburse her $2,400 if her car is stolen. Using MB and MC curves, show Myra's optimal number of precautions.

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The Answer of Myra drives a Honda Accord, the most stolen car in the United States. She can take precautions to prevent her car from being stolen. The marginal benefit and marginal cost of these actions are MB = 10 - 0.2A and MC = 2 + 0.6A, where A is the number of precautions. Myra values her car, a 1994 model, at $2,400.
a. Graph Myra's MB and MC curves and show the optimal number of precautions.
b. Suppose that Myra adds comprehensive coverage to her car insurance, which will reimburse her $2,400 if her car is stolen. Using MB and MC curves, show Myra's optimal number of precautions.

Myra Drives a Honda Accord, the Most Stolen Car in the United