Z
Zia ur Rahman
Guest
Should people have the right to sell parts of their bodies? Congress believes the
answer is no. In 1984; it passed the National Organ Transplantation Act, which
prohibits the sale of organs for transplantation. Organs may only be donated.
Although the law prohibits their sale, it does not make organs valueless. Instead,
it prevents those who supply organs (living persons or the families of the
deceased) from reaping their economic values. It also creates a shortage of
organs. Each year, about 8,000 kidneys, 20,000 corneas, and 12,000 hearts are
transplanted in the United States, but there is considerable excess demand for
these organs and many potential recipients must do without them. Some
potential recipients die as a result.
To understand the effects of this law, let’s consider the supply and demand for
kidneys. First the supply curve. Even at the price of zero (the effective price
under the law), donors supply about 8,000 kidneys per year. But many other
people who need kidney transplant cannot obtain them because of the lack of
donors. It has been estimated that 4,000 more kidneys will be supplied if the
price were $20,000. We can fit a linear supply curve to this data. That is a supply
curve of the form Q = a + bP.
Thus the supply and demand functions can be written as:
Supply: Qs = 8000 + 0.2P
Demand: Qd = 16000 – 0.2P
Because the sale of kidneys is prohibited, the supply is limited to 8,000 (the
number of kidneys that people donate). This constrained supply can be plotted
as a vertical line.
Many complex and ethical issues are involved in the sale of organs. These
issues are important, and this example is not intended to sweep them away.
Economics, the dismal science, simply shows us that human organs have
economic value that can’t be ignored, and that prohibiting their sales imposes a
cost on society that must be weighed against the benefits.
12- Using the given supply and demand functions, the market clearing
price level for human kidneys can be estimated as:
Marks: 2
A. $19,962
B. $20,000
C. $20,258
D. $21,272
13- Using the same scenario, the market clearing quantity for human
kidneys can be estimated as:
Marks: 2
A. 11,658
B. 11,990
C. 12,000
D. 12,989
14- At market clearing level of price and quantity, the reasonable estimate
for the price elasticity of demand for human kidneys is:
Marks: 3
A. - 0.3333
B. - 0.3643
C. 0.3882
D. 1.3512
15- At market clearing level of price and quantity, the reasonable estimate
for the price elasticity of supply for human kidneys is:
Marks: 3
A. - 0.2643
B. 0.0882
C. 0.3333
D. - 1.3812
answer is no. In 1984; it passed the National Organ Transplantation Act, which
prohibits the sale of organs for transplantation. Organs may only be donated.
Although the law prohibits their sale, it does not make organs valueless. Instead,
it prevents those who supply organs (living persons or the families of the
deceased) from reaping their economic values. It also creates a shortage of
organs. Each year, about 8,000 kidneys, 20,000 corneas, and 12,000 hearts are
transplanted in the United States, but there is considerable excess demand for
these organs and many potential recipients must do without them. Some
potential recipients die as a result.
To understand the effects of this law, let’s consider the supply and demand for
kidneys. First the supply curve. Even at the price of zero (the effective price
under the law), donors supply about 8,000 kidneys per year. But many other
people who need kidney transplant cannot obtain them because of the lack of
donors. It has been estimated that 4,000 more kidneys will be supplied if the
price were $20,000. We can fit a linear supply curve to this data. That is a supply
curve of the form Q = a + bP.
Thus the supply and demand functions can be written as:
Supply: Qs = 8000 + 0.2P
Demand: Qd = 16000 – 0.2P
Because the sale of kidneys is prohibited, the supply is limited to 8,000 (the
number of kidneys that people donate). This constrained supply can be plotted
as a vertical line.
Many complex and ethical issues are involved in the sale of organs. These
issues are important, and this example is not intended to sweep them away.
Economics, the dismal science, simply shows us that human organs have
economic value that can’t be ignored, and that prohibiting their sales imposes a
cost on society that must be weighed against the benefits.
12- Using the given supply and demand functions, the market clearing
price level for human kidneys can be estimated as:
Marks: 2
A. $19,962
B. $20,000
C. $20,258
D. $21,272
13- Using the same scenario, the market clearing quantity for human
kidneys can be estimated as:
Marks: 2
A. 11,658
B. 11,990
C. 12,000
D. 12,989
14- At market clearing level of price and quantity, the reasonable estimate
for the price elasticity of demand for human kidneys is:
Marks: 3
A. - 0.3333
B. - 0.3643
C. 0.3882
D. 1.3512
15- At market clearing level of price and quantity, the reasonable estimate
for the price elasticity of supply for human kidneys is:
Marks: 3
A. - 0.2643
B. 0.0882
C. 0.3333
D. - 1.3812