Weak government enforcement of contracts and laws tends to

• A. not affect economic activity, as incentives for theft and deception are low.
• B. discourage economic activity by encouraging private-sector coercion such as blackmail and extortion.
• C. increase economic efficiency by minimizing government interference.
• D. stimulate innovation and investment.

On what assumption do neoclassical and behavioral economics disagree?

A. People are free to make decisions.

O B. People are almost entirely self-interested.

O C. People have motivations.

• D. People have preferences.