Suppose the total social benefits of crime protection increase from $800,000 to $900,000 and total social costs increase from $650,000 to $800,000,with the addition of another unit of crime prevention services.

Question

Quizplus · Accepted Answer

The marginal social benefit (MSB) of the additional unit is $100,000 ($900,000 - $800,000), while the marginal social cost (MSC) is $150,000 ($800,000 - $650,000). Since MSB < MSC, crime prevention activities should not be expanded.

Suppose the Total Social Benefits of Crime Protection Increase from $800,000