Suppose that the equation that represents the expected benefits of burglary for a given prospective criminal is as follows:
EB = Ps x Loot
The criminal's cost equation is as follows:
EC = [Pp x (I + F)] + AC
Where:
EB is the expected benefits of burglary
Ps is the probability of successfully burglarizing a house
Loot is the dollar take from the burglary
EC is the expected costs of burglary
Pp is the probability of imprisonment
I is the income the criminal gives up if caught and imprisoned
F is the dollar value the criminal puts on freedom
AC is the anguish cost of committing a burglary
-Refer to Situation 33-1.If the prospective criminal sets the following values: Ps = 65 percent
Loot = $20,000
Pp = 20 percent
I = $30,000
F = $15,000
AC = $5,000
The prospective criminal's expected benefit from committing the burglary is ______________ and his expected cost of committing the burglary is _______________.Economic theory tells us that under these circumstances,the prospective criminal ______________ commit the burglary.
A) $13,000; $14,000; will
B) $13,000; $14,000; will not
C) $6,667; $50,000; will not
D) $57,500; $50,000; will

Question

Quizplus · Accepted Answer

Plugging in the given values into the equations, we get:
EB = 0.65 x $20,000 = $13,000
EC = [0.20 x ($30,000 + $15,000)] + $5,000 = $14,000
Since the expected cost of committing the burglary exceeds the expected benefit, economic theory tells us that the prospective criminal will not commit the burglary. Therefore, the best choice is B.

Suppose That the Equation That Represents the Expected Benefits of Burglary