Consider the hypothetical supply and demand of Kidneys.
Initially, kidneys are exchanged by donations only (price=0). If the government decides to legalize kidney sales and the market reaches equilibrium, then:
A. total surplus increases.
B. consumer surplus remains the same.
C. producer surplus remains the same.
D. a shortage of kidneys will arise.
A. total surplus increases.
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Maximizing social benefit is maximizing consumer surplus
Indicate whether the statement is true or false
Which of the following is not an important issue in the Keynesian-Monetarist debate?
A. the relative importance of monetary and fiscal policy B. the nature of the transmission mechanism through which a change in the money supply affects the economy C. the shape of the investment-demand curve D. the shape of the money supply curve