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6 Assume the sale of human organs is legalized and a free market de

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6. Assume the sale of human organs is legalized and a
free market develops. Furthermore, assume the market is
in equilibrium. Trace through the price and output effects
of the following:
A. An increase in the incomes of potential buyers of human
kidneys
B. A decrease in the price of kidney dialysis
C. The development of a new drug that leaves the immune
system intact while preventing transplant rejection
(Waldholz, 1992)
D. A greater willingness by individuals to supply human
kidneys
Solution
A. An increase in the incomes of potential buyers of human
kidneys
Increase in income of potential buyers will result in to the
more demand of human kidneys and it will propel the price
of it on higher side. It can further result in to more supply
of human kidneys.
B. A decrease in the price of kidney dialysis
Decrease in price of kidney dialysis does not effect the
demand or price of human kidney as dialysis process is
never going to be the substitute of original human kidney.

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6. Assume the sale of human organs is legalized and a free market develops. Furthermore, assume the market is in equilibrium. Trace through the price and output effects of the following: A. An increase in the incomes of potential buyers of human kidneys B. A decrease in the price of kidney dialysis C. The development of a new drug that leaves the immune system intact while preventing transplant rejection (Waldholz, 1992) D. A greater willingness by individuals to supply human kidneys Solution A. An increase in the incomes of potential buyers of human kidneys Increase in income of potential b ...
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