6 Figure 21.3 shows various types of national health insurance systems.

(a) Compare the total expenditures in panels A and B. Which set of expenditures is larger? What determines which will be larger? Why?

(b) Compare the total expenditures in panels B and C. Which set of expenditures is larger? In which are resource costs larger? Why?

(c) If the demand curves truly refl ect consumer preferences, which of the three panels is economically effi cient? Show the economic losses and the transfers for those panels that are not economically effi cient.