ABSTRACT
WE can next show how this trade-indifference map can be used for the purpose of analysing problems of international trade. Consider on Figure III the positions indicated by the successive price lines a0 and a1. With a1, a relatively large amount of B-exportables (measured on the Y-axis) can be obtained for a given amount of A-exportables (measured on the X-axis); but with a0, only a relatively small amount of B-exportables can be obtained for the same amount of A-exportables. Thus as the price line a becomes steeper and steeper the price of A-exportables rises relatively to that of B-exportables and the terms of trade move in favour of A-exportables.
