ABSTRACT
In the comparative-cost approach to the problem of gain from foreign trade, the stress is put on the possibility of minimizing the aggregate real costs at which a given amount of real income can be obtained if those commodities which can be produced at home only at high comparative costs are procured through import, in exchange for exports, instead of being produced at home. In the later development of the theory of international trade, several methods of dealing with the income aspects of foreign trade are introduced, and in the exposition of Marshall and Edgeworth, though the comparative costs are still a factor in the situation,l they appear in the analysis only implicity through their influence on the reciprocal-demand functions, which, in so far as they are
welfare functions, represent "net" income or income-minus-cost quantities.
