Question

In this module, you have learned about various economic markets including goods that a government does not allow to be sold in a market. Do you believe there should be limitations of these items?  For example, should there be a market for human kidneys? If people can sell their sperm or their eggs, why should kidneys be any different?

• Define demand, supply, and equilibrium in markets for goods and services.
• Identify factors that cause shifts in demand and supply for good and services.
• Describe how changes in supply and demand change equilibrium price and quantity.

Answer 1

There definitely should be cap and limits on goods sold which are condemned and must be regulated by government. Human kidney as such should havr transparency based open market where donor and receivers are guided by well established institutions and these institutions must be monitored and scrutinized on regulatory basis. Kidneys have had notion of being sold under black marjet for its high demand and price and is not readily available and hence people tend to sell under black markets for higher prices.

Equilibrium prices are the point at which quantity demanded equals quantity supplied. Supply and demand are principles of economic midel of price determination.

Factors like adverse supply shock, government regulations, import duties, export subsidies, taxation policies all affect supply and demand.

Changes in supply can affect the demand and hence the prices which thus lead to changes in equilibrium point