ABSTRACT
John Stuart Mill is esteemed as a pioneer of neoclassical economics by his contribution to the theoretical development of supply and demand theory. There are two types of theories for analysing international trade in Mill's Essays. One is the theory of supply and demand, and the other is the theory of reciprocal demand. Mill expands these theories into the analysis of his Principles of Political Economy. This chapter examines the relation between these two theories and Mill's idea of international trade. It focuses on Mill's concept of 'extensibility' of demand. Mill refers to Torrens in relation to the theory of supply and demand which was applied to the analysis of the effect of the tax on export and import. The chapter considers the effects of export tax on the change of the balance of trade.
