Question

4. Suppose an individual is solely interested in maximizing his income and could earn $20,000 per year in a legitimate line of employment. However, if the individual were to become a professional thief he could earn $2,500 an average for every heist. Assume the probability of getting caught and spending one year in jail is 20 percent. Should ne become a thief? Explain your answer (it may require a bit of math).

Answer 1

income In legitimate line of employment, income = $20,000 per yan- In thief line, let's say he does one heist a month. u. In a year, there are 12 heist. 20% charge chance is of getting caught, so the 8o. chance of success. e Income = 0.80 x 12 x 2500 - $24,000 a year, Since his only interest is in maxinasing & he should become a thief