Problem 6. An agent has a von Neumann-Morgenstern utility function My), where y is her income. This agent may engage into criminal activities. The revenue of these activities are c. If she gets caught, there is a sanction 3 that has to be paid. Assume that the government spends an amount or on police force. The probability of detection of a criminal activity is p{m) E ((3,1)1 where p'(m) > 0 and p\"{m}