The chapter lists the three reasons for higher crime rates in large cities. For each reason below, redraw Figure 13–3 , assuming all other conditions remain constant. a. More loot. b. Lower probability of arrest. c. More female-headed households.

Step 1 of 3

Optimum number of crimes is determined by the interaction of the marginal benefit and marginal cost curve. The marginal benefit curve slopes downwards, suggesting a lower value earned per crime when many criminals commit many crimes. The supply or marginal cost curve slopes upwards, suggesting that more crime is committed when loot prices are higher.

 a)

The equilibrium combination of loot price and crime quantity is shown by point A in Figure 1. One condition likely to raise the equilibrium number of crimes in large cities is the amount of loot.

Large cities are accommodated by riches, which implies a higher amount per loot. Evidence suggests that the average value per crime is $900 in a large city compared to $550 for a crime in a small city.

This encourages more criminals to commit crimes in large cities. Since the marginal benefit per crime is now higher, the marginal benefit curve shifts up from MB1 to MB2. This raises the price of crime, which is the loot in dollars and the crime rate.