The entire marginal cost curve for a perfectly competitive firm represents its short-run supply curve

In the United States, the bulk of health care spending is paid by health insurance companies

Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider. Why might such a system lead to an inefficient outcome? A) Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services. B) Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments. C) Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services. D) Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients.

Which of the following is NOT one of the factors your text identifies that could affect the size of the multiplier?

A) What sector of the economy receives the initial increase in spending B) How the spending is financed C) Whether the economy is in recession or at full employment D) Whether the economy is in autarky equilibrium