VALUES IN INTERNATIONAL TRADE 201

countries. Brazil offers a price in her money for oil, America
offers a price in her money for coffee. Each of the commodities
 exchanged is similarly offered, and the extent of
the demand and supply is dependent on the relations of the
two moneys. Thus Brazil's supply of coffee is a supply of
certain quantities of coffee at certain prices in Brazilian
money. The United States demand is for coffee in certain
quantities at corresponding prices in United States money.
The rate of exchange of the one money for the other depends
on the general balance of transactions between the two
countries.
While the relative valuation of imported and exported
commodities depends on the variation of the intensity of
demand with changes in the amount of the supply of each of
the two exchanged commodities, we need to look further in
many cases, since the supply is partly made up of home
products, partly of imported products. In the above case, if
the valuation of coffee in terms of oil be determined, inasmuch
 as the value of oil relatively to other home-produced
goods in the United States is determined according to the
principles applying to domestic-trade values, the value of
coffee relative to all these home-produced goods is determined,
 and in a similar way the value of all other imported
commodities will also be determined, both relatively to homeproduced
 goods, and hence, derivatively, relative to each other.
These valuations are expressed, in the usual way, in terms of
prices. When foreign goods are able to be imported so as
to sell at prices which express a marginal utility less than
that of the actual supply, the demand for the goods expands,
and a larger supply is sought. The supply may be able to
be enlarged without leading to any change in the price at
which the goods can be offered, and the demand may thus
be satisfied by mere enlargement of supply till the marginal
utility falls to the level expressed by the price. The changes
which correspond to a price increasing as the supply is
increased, and to a supply which can be increased under
conditions which enable it to be offered at a reduced price,
follow so much the lines of preceding discussions in regard
to values, that they need not be worked out in detail here.