ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If the government allowed a free market for transplant organs such as kidneys to exist, the
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shortage of organs would be eliminated, and there would be no surplus of organs.
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shortage of organs would be eliminated, but a surplus of organs would develop
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shortage of organs would persist.
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overall well-being of society would remain unchanged.
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Explanation:
Detailed explanation-1: -This law creates a price ceiling at a price of $0. This price ceiling is below equilibrium and causes a shortage of kidneys available for transplant. The policy may also create an illegal market in which people sell kidneys at very high prices and quality is not assured.
Detailed explanation-2: -Consumer surplus equals buyers’ willingness to pay for a good minus the amount they actually pay for it. Consumer surplus measures the benefit buyers get from participating in a market. Consumer surplus can be computed by finding the area below the demand curve and above the price.
Detailed explanation-3: -Consumer surplus always increases as the price of a good falls and decreases as the price of a good rises.
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