Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 6QE
(a)
To determine
Impact of legalizing the organ donation.
(b)
To determine
Impact of increased supply of organs from donors.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The demand curve for kidneys is downward sloping and the supply curve of kidneys is upward sloping. If it is unlawful to pay someone for a kidney, fewer kidneys will be forthcoming. In other words, the quantity supplied of kidneys is less at $0 than at, say, 20,000.Fewer kidneys supplied mean fewer kidney. Would there be fewer kidney transplants if the supply curve of kidneys is vertical?
Consider that the retail market for sanitizing wipes in a small locale is described by the follow demand and supply equations respectively: P = 8.40 - 0.02Q and P = 6.60 + 0.01Q where P is the price
in dollars and Q is the quantity measured in thousands per week. The market is currently in equilibrium.
(Question 8 of 8)
Now consider than an unexpected viral outbreak led to consumers ensuring that much more surfaces (counter tops, door handles, etc.) are clean and sanitized. At the same time, the government's
demand for sanitizing wipes at various public institutions (hospitals, schools, etc.) has impacted the supply of sanitizing wipes in the retail market. Although the government is neither a buyer nor
seller in the retail market, their requests for sanitizing wipes does affect how many sanitizing wipes firms are able to supply in the retail market. The market for sanitizing wipes adjusts afterwards
and the market is in equilibrium.
Suppose that after the market for sanitizing wipes…
The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay
for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current
demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30. Dsubsidy =
$60. and Dsubsidy = $90
Price
$240
$220
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
0
100
50
S-MC
Quantity of pediatrician visits
Cial
Dubsidy-510
Dobity-360
Dudy-130
private
MB
450
500
Tools
A.
DWL 30
DWL0
a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is.
visits
b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90.
Instructions: Use the tools provided "DWL 30' and 'DWL 90' to illustrate the deadweight loss for each subsidy Drag the points to move
or resize.
Chapter 5 Solutions
Microeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
Knowledge Booster
Similar questions
- The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30, Dsubsidy = $60, and Dsubsidy = $90. Price $240 $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 0 5000 150 200 (200, 210) S=MCpvt-MC social 250 300 350 400 Quantity of pediatrician visits 450 D subsidy=$90 D subsidy=$60 Dsubsidy=$30 MB private 500 Tools DWL90 DWL 30 a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is: b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90. Instructions: Use the tools provided 'DWL30' and 'DWL90' to illustrate the deadweight loss for each subsidy. Drag the…arrow_forwardSome have argued that higher cigarette prices do not deter smoking. While there are many arguments both for and against this view, some find the following argument to be the most persuasive of all: “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.”Do you agree or disagree with this view? Disagree - the reduction in demand will push the equilibrium price below its original level. Disagree - this confuses a change in demand with a change in quantity demanded. Agree - the price increase will ultimately leave cigarette consumption unchanged. Disagree - higher cigarette prices will actually increase the demand for cigarettes.arrow_forwardIn Country Faraway, cigarettes are forbidden, so people trade cigarettes in a black market. The cigarette demand is QD = 12 − P , and the cigarette supply is Qs = 2P . Find the equilibrium price and quantity in the black market. The government becomes aware of the black market and reinforces the police so that half of the cigarette supply would be seized and destroyed. Under this circumstance, what are the demand and supply functions? What is the new equilibrium price and quantity? Show the change by using a supply and demand diagram.arrow_forward
- Q4. Assume the market of non-medical masks can be described by the following equations: Demand: QD= 20 - P Supply: QS=2P-10 Where the quantity QP and QS are in millions, and price P is in dollars. Suppose all the masks are imported, and government decided to set a quota at 5 million units. a) Compute the pre-quota equilibrium price and quantity and illustrate your answers graphically. b) In your graph of a) Clearly show the con umer surplus (CS) and producer surplus (PS) before and after the quota. c) Show the dead weight loss (DWL) in the graph and calculate it.arrow_forwardSuppose the government imposes a system of price ceilings in the health care industry as part of an overall health care reform bill. a) what happens to the amount of market exchange ? b) explain the impact of the price ceiling on efficiency c) who bears the cost of the regulation?arrow_forwardPreventative care refers to care taken to prevent future diseases rather than to treat current ones. Compared to emergency room care, preventative care is rarely urgent, and benefits can be difficult to measure-if you had the flu vaccine this year but did not catch the flu, it is difficult for an individual to tell if that was because of the shot or assiduous hand washing. Given this description, we would expect the price of preventative care to be relatively price elastic compared to emergency room care. less morearrow_forward
- How do you suppose the demographics of an agingpopulation of “Baby Boomers” in the United States willaffect the demand for milk? Justify your answer.arrow_forwardLet's consider the market for spaces in medical schools (for doctors, say). Suppose the demand for space is given by QD=120-0.5P where P is the price of attending medical school (in thousands of dollars). Also suppose the supply is given by Qs=0.5P. The equilibrium price in this market is The equilibrium quantity of spaces provided is Going to medical school provides a private benefit to the person attending (the future doctor). But, it also benefits the public in that there are more doctors available to provide healthcare. Therefore, this a market with ✓externalities. Suppose that the additional benefit to society from each space in medical school is 60,000 dollars. In this case, the efficient quantity of spaces (that which would most benefit society) is The goverment could achieve the socially efficient outcome by an amount of ✓dollars per space. ✓the schools that provide spacesarrow_forwardWhat are the limitations with the Quantity- Quality (QQ) modelarrow_forward
- The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatricians' visits (D1), and three alternative subsidies, represented by curves D2, D3 and D4. a. Assume that the correct level of subsidy is D3. Compared to the efficient outcome, graph the loss in total surplus that would result from subsidies D2 and D4. b. The socially optimal level of pediatrician visits is __ visits.arrow_forwardA website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent examinations of their emerald, which are available to the customer for inspection. How would you expect this improved information to affect demand for emeralds on this website? How would you expect this improved information to affect the quantity of high-quality emeralds sold on the website?arrow_forwardPlease answer the following questions thoroughly: Some argue that the price elasticity of demand can be used to determine whether a good or service is a luxury or a necessity. In medical care, a procedure with an elastic demand would be considered optional, or elective, and a procedure with an inelastic demand would be a medical necessity. 1) Should planners use price elasticity of demand as a guide to defining services that are medically necessary? 2) What are the advantages of such a classification scheme? 3) What are the drawbacks?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning