1. Kidney Transplants and the One Lesson of Business (2 points)

According to the Organ Procurement and Transplantation Network, there are about 107,000 individuals on a waiting list for an organ transplant in the United States. Of those 107,000, about 90,000 are waiting for a kidney.

a) It is currently illegal to sell kidneys in the United States, describe why this results in inefficiency. In other words, describe why this might result in certain "assets" staying in relatively low valued uses. (1 point)

b) Recognizing this inefficiency as a way to make money, you decide to borrow $80 million at 30% annual interest, buy a hospital ship, anchor it in international waters, set up a database to match donors to recipients, broker sales, and fly in experienced transplant teams. In all, this costs you $135,000 per transplant. If you charge $150,000 per transplant, you would need to do minimum of _________ transplants to cover the interest on your loan. This represents just ______ % of potential demand for kidneys in the United States alone. (1 point)