Economics • Economic BasicsHard
Which of the following theorems in public economics demonstrates that majority voting can lead to cyclical and inconsistent social preferences?
A. Arrow's Impossibility Theorem
B. Condorcet's Paradox✓ Correct Answer
C. Wicksell's Unanimity Rule
D. Median Voter Theorem
💡 Solution & Explanation
Condorcet's Paradox demonstrates that majority rule voting systems can produce intransitive and cyclical social preferences even when every individual voter possesses rational preferences. Arrow's Impossibility Theorem builds upon this to show that no ranked-voting electoral system can convert individual preferences into a complete community preference without violating fairness criteria.
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