Changes

<br>(e) Can’t tell. (Winning answer otherwise)

<br>(e) Can’t tell. (Winning answer otherwise)

Argument:  

'''Argument:'''

In order for China to only make tennis rackets it must buy shoes from America. Thus, instead of making one racket and one pair of shoes for a total of 8 units, China can make 3 rackets and sell two of them to the US for a pair of shoes and 8 units: thereby saving themselves 7 units! This brings us to a particular bit of wisdom that I think is rather poetic: If it sounds too good to be true, it probably is. The flaw in China’s racket-only money-making scheme is that they can’t continue to make only rackets forever. No matter what the demand for rackets, it cannot be infinite (Lets say hypothetically that each country has demand for 1000 of each good). Therefore, China will only be able to sell a limited number of rackets to the US; when they have sold all 1000 rackets to the US, they will have only gained 500 shoes and will be forced to produce their own. QED.

In order for China to only make tennis rackets it must buy shoes from America. Thus, instead of making one racket and one pair of shoes for a total of 8 units, China can make 3 rackets and sell two of them to the US for a pair of shoes and 8 units: thereby saving themselves 7 units! This brings us to a particular bit of wisdom that I think is rather poetic: If it sounds too good to be true, it probably is. The flaw in China’s racket-only money-making scheme is that they can’t continue to make only rackets forever. No matter what the demand for rackets, it cannot be infinite (Lets say hypothetically that each country has demand for 1000 of each good). Therefore, China will only be able to sell a limited number of rackets to the US; when they have sold all 1000 rackets to the US, they will have only gained 500 shoes and will be forced to produce their own. QED.

Other complications:

'''Other complications:'''

This question involves an interesting though unrealistic mix of a monopoly and a monopsony: While China is the only country that can afford to produce tennis rackets, it also has only one country to whom they can sell. One might argue (as I did above) that China will sell 2 rackets to the US for one pair of shoes and 7 units (which saves America 1 unit and China 6), yet one also might argue that the price would be 2 rackets for one pair of shoes and 2 units (which saves America 6 and China 1). You can only really tell that the number of units given to China in addition to the pair of shoes will be > 1 and < 9.  

This question involves an interesting though unrealistic mix of a monopoly and a monopsony: While China is the only country that can afford to produce tennis rackets, it also has only one country to whom they can sell. One might argue (as I did above) that China will sell 2 rackets to the US for one pair of shoes and 7 units (which saves America 1 unit and China 6), yet one also might argue that the price would be 2 rackets for one pair of shoes and 2 units (which saves America 6 and China 1). You can only really tell that the number of units given to China in addition to the pair of shoes will be > 1 and < 9.  

The quick, easy, common-sense, solution:

'''The quick, easy, common-sense, solution:'''

Why would America ever produce a pair of shoes for 10 units when they can buy one from China for somewhere in between 5 and 10?

Why would America ever produce a pair of shoes for 10 units when they can buy one from China for somewhere in between 5 and 10?

Why China will produce all the tennis rackets and all the shoes:

'''Why China will produce all the tennis rackets and all the shoes:'''

In the situation above involving in which China sells two rackets to the US for a pair of shoes and between 1 and 9 units, the combined units that the two countries save is 7 units per two rackets and pair of shoes. Alternately, if China produces two rackets and a shoe and then sells rackets to the US (for between 3 and 9 each) the combined units that the two counties save for each two rackets and pair of shoes is 12.

In the situation above involving in which China sells two rackets to the US for a pair of shoes and between 1 and 9 units, the combined units that the two countries save is 7 units per two rackets and pair of shoes. Alternately, if China produces two rackets and a shoe and then sells rackets to the US (for between 3 and 9 each) the combined units that the two counties save for each two rackets and pair of shoes is 12.

: This is really quite simple.  The overall consumption of resources to produce "x" rackets and shoes is minimized by 3x (China producing rackets) plus 10x (U.S. producing shoes), for a total of 13x.  If China produces just one pair of shoes, then the U.S. has to produce the corresponding racket, and their total is 14 rather than 13 the other way.  The wasted allocation of resources can no longer be shared as a benefit to one or both countries.--[[User:Aschlafly|Aschlafly]] 20:16, 24 May 2007 (EDT)

: This is really quite simple.  The overall consumption of resources to produce "x" rackets and shoes is minimized by 3x (China producing rackets) plus 10x (U.S. producing shoes), for a total of 13x.  If China produces just one pair of shoes, then the U.S. has to produce the corresponding racket, and their total is 14 rather than 13 the other way.  The wasted allocation of resources can no longer be shared as a benefit to one or both countries.--[[User:Aschlafly|Aschlafly]] 20:16, 24 May 2007 (EDT)

== Final Exam ==

== Final Exam ==