Author Question: In Spain, people are considered organ donors unless they explicitly indicate they do not want to be. ... (Read 58 times)

misspop · **on:** Jul 1, 2018

In Spain, people are considered organ donors unless they explicitly indicate they do not want to be. In the United States, people are only considered organ donors if they explicitly indicate they wish to be. Behavioral economics would suggest that

A) everything else equal, the opt-in system of Spain would generate more organ donors. as a percentage of the adult population.
B) everything else equal, the opt-in system of the United States would generate more organ donors as a percentage of the adult population.
C) everything else equal, the opt-out system of Spain would generate more organ donors. as a percentage of the adult population.
D) everything else equal, the opt-out system of the United States would generate more organ donors as a percentage of the adult population.

Question 2

Suppose the government currently places tariffs and/or other import restrictions on good X. Will imposing a tariff and/or trade restriction on good Y necessarily reduce overall social welfare for the economy?

What will be an ideal response?

joanwhite · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

C

Answer to Question 2

No, this follows from the contrapositive of the Theory of the Second Best. If removing one market distortion while leaving others in place may increase or decrease social welfare, the same is true for adding a market restriction while others are in place.