J.E. Meade assembled the analytical devices like the production possibility curve, the community indifference curves and offer curves in order to explain the general equilibrium of production, consumption and trade involving the two trading countries. Fig. 4.17 is employed to explain the general equilibrium situation concerning the two trading countries A and B. In Fig. 4.17, the commodity X is [...]
For analysing the trade equilibrium of a country, another device that is employed is the Offer Curve or, more precisely, the Trade Offer Curve of a country. The trade offer curve indicates what quantities of a particular commodity one country are willing to offer in exchange of certain quantities of another commodity. In other words, the offer curve shows the [...]
A production possibility curve is the locus of such combinations of two commodities that a country can produce, given the techniques of production and the fullest utilization of all the available factors of production. It is also called as production frontier, transformation curve, product substitution curve or an opportunity cost curve. If all the available productive resources are employed in [...]