Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured. In other words, the automobile insurance market is subject to

Explain why contracts are beneficial to markets

What will be an ideal response?

According to the median voter theorem, majority rule will

a. always produce an inconclusive outcome. b. produce the outcome least preferred by the median voter. c. produce the outcome most preferred by the median voter. d. produce an outcome that is inconsistent with transitive preferences.