Suppose the Market for Kidneys Is Depicted in the Graph

question 54

Multiple Choice

Suppose the market for kidneys is depicted in the graph shown. Initially, kidneys exchanges are regulated to allow donations only. This means kidneys can only be exchanged at a price of zero. What is the deadweight loss from this restriction?

• A)$0
• B)$825,000
• C)$1,350,000
• D)$1,500,000

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Definitions:

Magma Chamber

A magma chamber is a large pool of liquid rock beneath the surface of the Earth, where magma accumulates before a volcanic eruption.

Pillow Basalt

A volcanic rock formation characterized by rounded, pillow-shaped masses, formed when lava extrudes underwater and cools rapidly.

Fissure Eruption

A volcanic eruption through a crack or fissure in the earth's surface, often producing long linear volcanoes.

Valles Caldera

A large volcanic caldera located in the Jemez Mountains of northern New Mexico, known for its hot springs and geothermal activity.