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→'''Question 37 on the [[Economics:Final Exam|final exam]]'''
: I think the MR would factor in the comparative advantage in trading rackets for shoes, right?--[[User:Aschlafly|Aschlafly]] 10:29, 25 May 2007 (EDT)
: I think the MR would factor in the comparative advantage in trading rackets for shoes, right?--[[User:Aschlafly|Aschlafly]] 10:29, 25 May 2007 (EDT)
Acctually, my whole point is that I don't think that comparitive advantage affects the answer in this particular scenario. The Law of Comparative Advantage does indeed imply that the U.S. would be better off selling shoes to China for tennis rackets rather then producing their own rackets, but the Coase Theorem demonstrates that the U.S. would be ''even better off'' if they bought their shoes from China instead of producing them. I think that comparative advantage would only force the U.S. to make shoes if they could do so either more cheaply than China or at an equal price.
Just as a side note, if '''I''' were in charge of the U.S. tennis economy I would probably go with protectionism instead of free trade. --[[User:BenjaminS|Ben]] <sub>[[User Talk:BenjaminS|Talk]]</sub> 10:54, 25 May 2007 (EDT)
== Final Exam ==
== Final Exam ==