Econ 0858 Notes- 9.14.15.docx

Econ 0858 Notes- 9.14.15.docx - Econ 0858 Notes 9.14.15...

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Econ 0858 Notes- 9.14.15 Slide 12: Crime and Drugs Any action that is forbidden by law and carries criminal penalties Violent crimes: murder, rape, robbery, and assault Offenses against property: arson and theft Other crimes: gambling, prostitution, possession of and trafficking in drugs, and sales of pornography Slide 13: Crime and Drugs Crime costs: Damage to property and to people Policies undertaken by government to prevent and punish criminal activity Administering the criminal justice system Police, courts, and prisons Violent crime rates Have fallen since 1990 Slide 14: Table 2-1 Slide 15: Crime Prevention Crime prevention is an example of a public good Public goods and services Characteristics Indivisible Nonrivalrous Nonexcludable Subject to the free-rider problem (Benefiting from other people purchasing the good, example: street lights) Often provided by the government Examples: national defense, street lights, roads, crime prevention Slide 16: Crime Prevention Indivisible Impossible to divide into units sufficiently small to be sold in private markets
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Econ 0858 Notes- 9.14.15 (Coke can bottle up their drink into different cans and bottles and sell it to other people. You can’t do that with national defense) Nonrivalrous Use by one person does not prevent use by others We’re all getting the same product of national defense Nonexcludable Benefits cannot be kept from persons who do not pay for the goods’ provision in a private market Cannot stop people from not benefiting from national defense even if they don’t pay their taxes Slide 17: Crime Prevention Free-rider problem Individuals that do not pay their share for a good or service nevertheless enjoy its benefits Private market Is not efficient in providing public goods Government Usually provides public goods and services Finances them with tax revenues Slide 18: Crime Prevention Crime prevention measures Police
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