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#### Does a More Severe Penalty Work? Using the data of Table 1 as a starting point, fill out the numbers to make the loot \$156 and the anguish cost from crime 1 util

###### Economics

Does a More Severe Penalty Work? Using the data of Table 1 as a starting point, fill out the numbers to make the loot \$156 and the anguish cost from crime 1 util. The probability of successful crime is 0.5 and the probability of prison is 0.5. Baseline Longer prison term Prison School Lower anguish 100 100 100 100 Legal income (S) 156 156 156 156 Loot (\$) 0.5 0.5 0.4 0.4 Probability of prison 0.36 0.91 0.91 0.91 Prison time
Lawful utility = (legal income) Utility from successful crime Net income - Legal income + Loot Utility = (Net income)1/2 Utility from failed crime Prison cost = prison time. legal income Net income = Legal income- prison cost Utility = (Net income)"2 Expected utility from crime (utils) Anguish cost 1 1 0 EU Crime - Anguish a) The payoff from crime (the expected utility minus anguish cost) is utils and the payoff (utility) from lawful activity is utils. b) Suppose the length of the prison term increases to 0.91 units of time, and nothing else changes from part (a). The payoff from crime (increases, decreases) to utils. c) Suppose that extra schooling from the longer prison term increases criminal productivity, decreasing the probability of prison to 0.40. No other numbers change from part (b). The payoff to crime [increases, decreases) to utils. d) Suppose that a longer prison term reduces anguish cost to zero, and no other numbers change from part (c). The payoff from crime (increases, decreases] to utils and is [less, greater than the payoff from lawful activity.

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### Option 2

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