Suppose that SmallCity,USA,is considering hiring an additional police officer.The reduction in crime is estimated to be worth $20 for each of SmallCity's 3,000 residents.What should the city do?
A)Hire the police officer because additional safety is priceless.
B)Hire the police officer if the cost of the new officer is less than $60,000.
C)Do not hire the police officer because the costs exceed the benefits.
D)Hire the police officer only if the benefit to the residents exceeds $3,000.

Question

Quizplus · Accepted Answer

The estimated benefit of hiring an additional police officer is $20 per resident, which equals $60,000 for SmallCity's 3,000 residents. Therefore, if the cost of hiring the new officer is less than $60,000, it would be financially beneficial for the city to do so. If the cost exceeds $60,000, then the costs would exceed the benefits, making it not worth the investment for the city.

Suppose That SmallCity,USA,is Considering Hiring an Additional Police Officer