Suppose that a very high tariff was placed on steel imported into the United States. How would that affect employment in the U.S. auto industry? (Hint:

Think about how higher steel prices will impact the cost of producing automobiles.)

*8. “Getting more Americans to realize that it pays to make things in the United States is the heart of the competitiveness issue.” (This is a quote from an American business magazine.)

a. Would Americans be better off if more of them paid higher prices in order to “buy American”

rather than purchase from foreigners? Would U.S. employment be higher? Explain.

b. Would Californians be better off if they bought goods produced only in California? Would the employment in California be higher? Explain.