CONTENTS

PART 1
THEORY

THREE CASES. .

CHAPTER 1

PAGES
3-6

Preliminary assumptions. Three kinds of differences in cost:
absolute, equal, and comparative differences, 3.

CHAPTER 2
Case I — ABsoLuteE DIFFERENCES IN COST .
Barter of two commodities under the simplest conditions, 7.
The barter terms of trade, 8. Trade conducted with use of
money, 11. Domestic supply price, 11. Various possibilities
in exchange of two commodities produced with absolute differences
 in costs, 12. The gain from exchange greater to the
country of higher money wages, 14. Absolute differences in cost
found mainly in trade between tropical and temperate countries,
 17.

218

CHAPTER 3

Case II — EquaL DirFrereNcES IN CosT

EL
“He

19-22

Commodities produced with equal differences in labor cost
will not be exchanged, 19. What the situation is when money
is used and domestic supply prices are computed, 20. Money
wages adjust themselves to differences in effectiveness of labor,
21.

CHAPTER 4

Case IIT — ComparATIVE COSTS .
Two forms of comparative advantage in production: superior
advantage, inferior disadvantage, 23. How comparative advantages
 operate under barter; how when trade is conducted
with money, 24. Effect of changes in demand on the barter

23-33

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