I need some help with the following question. The questions are oriented to micr
ID: 1131884 • Letter: I
Question
I need some help with the following question. The questions are oriented to microeconomics subjects
1) A famous ONG argues that if the prison sentences for all crimes were doubled, this would worsen the problem of overcrowded prisons, all other things being equal. Use the concept(s) of marginal benet (or marginal cost) to explain why this argument is incorrect.
2) (a) Suppose that a group of sports fans is upset about the high price of tickets to many games. As a result of their lobbying efforts, a new law caps the maximum ticket price to any sporting event at $45. Will more people be able to attend the games? Explain your answer. Will certain teams and events be affected more than others? Provide examples.
(b) Defenders of Communist economic systems may point out that consumers pay lower prices for certain goods because the government imposes a limit on what producers may charge. Cite at least two other ways the consumers may be “paying” for these goods
Answer the previous two question(a and b) and think about how they are related. What is the common theme?
Explanation / Answer
Answer 1:
The statement is incorrect. This is because if the prison sentences of all the crimes doubles, then the marginal cost of committing the crime increases more than the marginal benefit from the cirme. When this happens, the number of crimes committed will decline as the marginal cost of committing the cirme outpasses the marginal benefit of committing the crime. Thus, if the prison sentences were doubled then the proble of over crowded prisons will not occur.