The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent. In the U.S
steel market, the "Buy American" provision in the 2009 stimulus package would
A) reduce the producer surplus received by foreign manufacturers.
B) transfer some deadweight loss to producer surplus.
C) transfer some producer surplus to consumer surplus.
D) convert some consumer surplus to deadweight loss.
D
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Tesla Motors manufacturers its cars at a plant in Fremont, California
At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla A) eroded some of its competitiveness in the luxury electric car market because of its increased cost of production. B) faced a trade-off between higher cost and lower precision. C) faced no trade-offs because employing more technically-skilled workers increased efficiency. D) adopted a negative technological change because it chose high-skilled workers over low-paid workers.
Researchers have found that tax increases may have a small effect in the quantity purchased because
A) individuals might forget about the tax (salience). B) individuals are rational. C) individuals are credit constrained. D) individuals do not care about prices.