7. Explain the relationships among cost minimization, cost effectiveness and economic
efficiency.
8. What factors enter into the determination of the cost-effective allocation of resources
between severity of punishment and certainty of punishment?
9. If a fixed amount of resources is cost-effectively allocated between severity and certainty of
punishment, does this necessarily mean that we have achieved the economically efficient
level of deterrence as well? Why or why not?
10. Regarding private investment in deterrence of crime, distinguish between ex post and ex ante
observable precautions and explain the reasoning that lies behind the conclusion that the
state should encourage ex post observable precautions but the state need not encourage ex
ante observable precautions