ESSENTIALS OF ECONOMICS-CONNECT ACCESS
11th Edition
ISBN: 9781260521252
Author: SCHILLER
Publisher: MCG
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Question
Chapter 3, Problem 1QFD
To determine
The
Expert Solution & Answer
Explanation of Solution
If the market in kidneys were legal, then the demand and supply curves look like the ones shown in the diagram.
The demand and supply for the kidney are relatively inelastic because this is the organ that a person needs in emergency situations despite its high cost. The demand for human organs is inelastic in nature.
If the market of kidneys is legal, then the person who needs the kidney would get them despite fluctuating prices.
The demand and supply mechanism keeps the market for the kidney in equilibrium.
If the law that prohibits the sale of kidneys exists in a market, the demand for kidneys will still remain the same. But since the supply is restricted, now a person can only donate the organ instead of selling them.
Suppose in the presence of a law that prohibits the selling of organs, X quantity of kidney is donated by peoples.
Since selling is prohibited, the supply curve is a vertical line parallel to the y-axis because supply is limited and cannot increase according to the market demand.
This explanation is shown in the graph, where the x-axis represents the quantity of the kidney and the y-axis represents the price for the kidney.
The ban or prohibition on the sale of human organs promotes barter exchange, other illegal activities and the black market in organ transfers.
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Students have asked these similar questions
Should There be a Market for Kidneys? People are born with two kidneys, but they usually need only one. Most of us walk around with an extra organ that we don't really need, while some of our fellow citizens are dying to get one. Is this fair? Should there be a market for Kidneys? Who would benefit the most from the market for Kidneys?
Listen to thisLinks to an external site. podcast about the market for human organs. https://www.npr.org/2008/05/21/90632108/should-we-legalize-the-market-for-human-organs Initial Response: Is there currently a surplus or shortage of human organs available for transplant? Using the demand/supply framework, explain how legalizing the trade for human organs will help move the market towards an equilibrium. Reply: Add to your original response by answering this question. What other product/market do you think should be legalized (or one that is currently legal and should not be) and why?
The graph below represents a simplified hypothetical version of the market for medical procedures in Canada.
If the market is allowed to set the price and quantity of procedures, what price and quantity will it set?
P = $7,000, Q = 62 thousand
P = $12,000, Q = 106 thousand
P = $7,000, Q = 112 thousand
P = $49,000, Q = 62 thousand
Chapter 3 Solutions
ESSENTIALS OF ECONOMICS-CONNECT ACCESS
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Similar questions
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