ABSTRACT
CONSIDER first the geometric representation given in Figure I. Measure up the axis OY the amount of B-exportables (or A-importables) consumed in country A and along the axis OX' (i.e. to the left of O) the amount of A-exportables (or B-importables) consumed in country A. Then in the quadrant X'OY we can draw a map of the A-consumption-indifference curves of which Ic is a representative. Let the block O P T P " represent the production possibilities in country A, so that on the assumption of full employment and technically efficient production in A, production in A will be represented by a combination of outputs lying on the line PTP" . In the closed economy OR of A-exportables and OU of B-exportables will be produced and consumed in country A.
