Exam 7: Consumers Producers and the Efficiency of Markets: Part B

If the United States legally allowed for a market in transplant organs,it is estimated that one kidney would sell for at least $100,000.

Producer surplus measures the benefit to sellers from receiving a price above their costs.

When demand increases so that market price increases,producer surplus increases because (1)producer surplus received by existing sellers increases,and (2)new sellers enter the market.

Each seller of a product is willing to sell as long as the price he or she can receive is greater than the opportunity cost of producing the product.

Markets will always allocate resources efficiently.