In 1960, 10 percent of every dollar paid in automobile insurance premiums went to pay costs arising from injuries incurred in car accidents. In 1990, 50 percent of every dollar paid in automobile insurance premiums went toward such costs, despite the fact that cars were much safer in 1990 than in 1960.

Which of the following, if true, best explains the discrepancy outlined above?

Correct answer marked below

There were fewer accidents in 1990 than in 1960.

On average, people drove more slowly in 1990 than in 1960.

Cars grew increasingly more expensive to repair over the period in question.

The price of insurance increased more rapidly than the rate of inflation between 1960 and 1990.

Health-care costs rose sharply between 1960 and 1990.

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What this question tests

Whether you can explain an apparent contradiction in a way that makes both facts true.

Picking an option that explains one side of the paradox while making the other side false.