A newspaper article in a large metropolitan area noted that the costs of crime in a given year were $900 million. This was made up of $100 million dollars for the police force and $800 million in stolen property.
- Was the $900 million an accurate accounting of the economic costs of the crime? Why or why not?
- A mayoral candidate ran on the basis of eliminating all crime in the city. Is this an economically efficient use of resources? Why or why not?
- Is victim "pain and suffering" a valid economic cost of crime? How would you measure it?
- If there is only a limited amount of money available for crime prevention, what is the economically efficient criterion for allocating it? Why?