In: Economics
Currently, there are chronic shortages of transplantable human organs. Waiting lists are long, and many of those waiting die before an organ becomes available.
1. Would it be more efficient than current arrangements if we were to allow an open market for buying and selling of human organs to develop? Be sure to consider
a. how scarce human organs are currently rationed among people who want them
b. the current arrangements for eliciting a supply of human organs and
c. the economic definition of efficiency
2. Would a market for human organs increase social welfare or reduce it? Explain, using the course concepts of producer and consumer surplus.
Please answer all the questions completely. Answer all the parts of part 1 (a, b, and c). answer # 2 aswell. please start the answer with responding to the question so i know right away which question is being answered.
Please make sure it is legible. If handwritten no cursive please only print. Typed would be preferable.
1. Yes, if there will be an open market for selling and buying of organs to develop then it will be more efficient than the current scenerio because presently there is limited number of organs , people do not get chance of buying it, they have to wait alot for the organ.
A. The scarce organs currently are being given to those who approach first ie first come first serve basis and the later one will have to wait for the another donor to donate his organ .
B. There are very few people who donate today, so current arrangement of getting an organ is to wait for the donor to give an organ and the get the transplant.
C. Efficiency : It is defined as a peak level of performance by a person that uses the least amount of inputs to achieve the highest amount of output.
2. The market for human organs will surely increase the social welfare as large number of organs will be available to the people who need it in emergency and they can buy it, otherwise the situation of waiting for the organ and eventually dying was very disappointing. This will improve the producer surplus as well because the seller will be able to sell the organ at a cost which is profitable to him and also consumer surplus will be there because the price of an organ in the market will be low as compared to the hospital where there are limited organs available and you have to pay for it.