During the recent economic slowdown, many jobs were lost in the Detroit area because of high prices (and therefore low sales) of domestically produced cars. Domestic companies that have succeeded in weathering the storm, such as Ford Motor Company, have done so by cutting unprofitable car lines, moving production toward more fuel-efficient vehicles, and cutting wasteful spending. Still, many workers lost their jobs.

a) In economic terms, explain whether the market is more or less efficient now than before the recession began.

b) Given an ethical concern for lost jobs, do you think an economist would be more likely to support policy that tries to keep Ford from cutting jobs or a policy that tries to help unemployed workers directly? Why?