Chapter 1A, Problem 1CTQ

To determine

The question requires us to:

• Determine why law enforcement agencies seek an amount of lawbreaking
• Consider some illegal activities that sometimes create more good than harm and compare the penalties for such activities with more serious crimes.
• Determine the number of fines people should be charged for doing something

Explanation of Solution

In economics, people make rational choices. They prefer what benefits them. For example, if there is no lawbreaking, law enforcement agencies will have nothing to do that may affect their job and national revenue. So, to perform and get a salary, law enforcement agencies seek an efficient amount of lawbreaking.

If an illegal activity causes better than harm, then penalties for such activities should be lower than the penalties for the more serious, and inefficient crime. One or two years of imprisonment with some monetary penalties should be charged for former crimes, while more than 10 years of imprisonment with a large sum of monetary penalties should be charged for later crimes.

The amount of fine for doing something that is completely prohibited should be more than the social and economic cost of doing that work. For example, if someone is selling drugs, then the fine charged to that person should be more than the losses (social + economic costs) the society is suffering.