If the parole chief knows that the benefit from preventing the next murder is $18,000, the...

If the parole chief knows that the benefit from preventing the next murder is $18,000, the benefit from preventing the next bicycle theft is $225, and the benefit from preventing the next assault is $6,000, but it costs $4,000 to prevent the next murder, $800 to prevent the next assault and only $50 to prevent the next bicycle theft, then the chief should decide to:

Select one:

a. Reallocate resources to prevent more assaults

b. Reallocate resources to prevent more bicycle thefts

c. Reallocate resources to prevent more murders

d. Do nothing since resources are already distributed optimally

Expert Solution

Benefit to Costs ratio for:

Murder = 18000/4000 = 4.5

Assault = 6000/800 = 7.5

Bicycle Theft = 225/50 = 4.5

Highest benefit to cost ratio is achieved by reallocatting resources to prevent more assaults.

Option A is correct.

Rahul Sunny answered 2 years ago

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