(Figure: Slave Redemption and Elasticity) Refer to the figure.How many new slaves are captured after the redemptionprogram is installed?
A)1,400
B)800
C)400
D)1,000

Question

(Figure: Slave Redemption and Elasticity) Refer to the figure.How many new slaves are captured after the redemptionprogram is installed?
A)1,400 
B)800 
C)400 
D)1,000

Quizplus · Accepted Answer

The redemption program leads to an increase in the price of slaves from $25 to $50. This raises the opportunity cost of holding slaves and reduces the profitability of slave ownership. As a result, the supply of slaves decreases from S1 to S2, and the quantity of slaves bought and sold in the market decreases from 2,000 to 1,600. The difference between the quantities demanded and supplied at the new price of $50 is 1,200, which represents the number of slaves who have been freed from captivity as a result of the redemption program. Therefore, 1,200 slaves have been redeemed and are no longer available for purchase. The total number of slaves in the market originally was 2,000, so the new number of slaves available for purchase is 2,000 - 1,200 = 800. Therefore, the answer is C.

(Figure: Slave Redemption and Elasticity) Refer to the Figure