The demand by sterile couples for babies to adopt has grown rapidly, while the supply has dwindled because of improved contraception, liberal abortion laws, and an increase in the probability that unwed mothers will keep their children. It violates the law to sell human beings at any age, but for every twenty legal adoptions there seemingly is one baby sale at a price up to $50,000 . The generic
term economists apply to the market produced by this type of shortage is
a. "black market."
b. "white slave market."
c. "the adoption market."
d. "baby market."
a
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The principle of increasing opportunity cost leads to
A) a production possibilities frontier (PPF) that is bowed inward from the origin. B) a production possibilities frontier (PPF) that is bowed outward from the origin. C) an inward shift of the production possibilities frontier (PPF). D) an outward shift of the production possibilities frontier (PPF).
As output increases, marginal cost
a. continually increases. b. continually decreases. c. increases, reaches a maximum and then declines. d. decreases, reaches a minimum and then rises.
If the adoption of a new technology led to gains in productivity ________
A) the ensuing positive supply shock would lead to an immediate increase in output B) in the short-run, the ensuing increase in supply would lower inflation C) and if this new technology permanently altered the productive capacity of the economy then the increase in output and decrease in inflation would be permanent as well D) all of the above E) none of the above
The equilibrium real wage is 25, the money supply equals 15, and k equals 3 . If equilibrium output is 10 then the equilibrium nominal wage is
a. 3. b. 4.5. c. .22 d. 5