Question

The 1984 National Organ Transplant Act makes it illegal to sell your kidney, which effectively creates a price ceiling at $0 (i.e. organs can only be given away for free). Despite this, some kidneys are available and transplanted each year.

If this law was removed and it became legal to sell your kidney for any price then:

fewer people would receive kidney transplants.

consumer surplus in the market for legal kidney transplants would increase.

the number of black-market operations would increase.

total surplus in the market for legal kidney transplants would increase.

Answer 1

At $0 there would not be supplied any kidney. But when the price is above $0 then more people can get a kidney.  

Consumer surplus will be decreased. Consumer surplus is (willingness to pay - the market price). Market price increases so consumer surplus decreases.

The black market exists when there is price ceiling which creates a shortage. Or when it is illegal to sell but sellers sell to buyers then it creates a black market. Here selling a kidney is legal and can sell at any price so it would not create a black market.

At $0 if sellers do not sell kidney then there is no surplus. But when the price is above $0 then it creates both consumer and producer surplus. So total surplus would increase.

Therefore the last option is correct.