Suppose there are two potential criminal offenders: Charlie and Dan. Charlie and

Question

Suppose there are two potential criminal offenders: Charlie and Dan. Charlie and Dan have different levels of wealth, but the same opportunity cost of serving prison time. In particular, Charlie has a wealth of $5,000 and incurs a cost of $1,000 per month spent in prison. Dan has a wealth of $7,000, but also incurs a cost of $1,000 per month spent in prison. Suppose that optimal deterrence of a particular crime requires setting the expected punishment equal to $2,000. Assume that the probability of apprehension is fixed at 0.2.

1. In order to achieve optimal deterrence at the lowest cost, what combination of fine (f) and prison term (t) (in months) should Charlie face? f = _________ , t = ______________

2. In order to achieve optimal deterrence at the lowest cost, what combination of fine (f) and prison term (t) (in months) should Dan face? f = _________, t = __________

3. Suppose considerations of fairness dictate that the prison term facing Charlie and Dan must be the same. What fixed fine and prison term must be imposed on the two offenders to maintain optimal deterrence? f = ___________, t = ____________. Is this policy efficient? (Enter "Yes" or "No") __________

Explanation / Answer

Following are the ways in which globalisation affects business -

Child labor is the most heinous crime that business commit by employing kids for cheap labor. Ethically employing children who are the future as labor is wrong. Employing children in harmful employement activities will hamper their right to education, over all development of the child. Child labor will never be acceptable by the law enforcing authorities. If companies come to know that children are employed for the production of their product then they must immediately transition them from the job and help them develop as a well grown and educated human being.

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