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of the total quantity of linen, shows that Mill's conclusions, given his 305b987c477f781d17bc82b94010de41 hiumptions, 305b987c477f781d17bc82b94010de41 are correct.10 the reduction in the hi of producing linen in Germany results in 305b987c477f781d17bc82b94010de41 the terms of trade moving against 305b987c477f781d17bc82b94010de41 linen. Given the effect of the reduction in BOOCX the german hi of producing linen on the german demand for cloth in terms of linen, the 305b987c477f781d17bc82b94010de41 degree of this movement of the terms of trade against linen is smaller, EDTPM the greater is the elasticity of the English demand for linen in terms of cloth.11 [540] When the elasticity of the English demand for linen in terms of cloth (the E curve) is unity, the new terms of trade are 305b987c477f781d17bc82b94010de41 10 cloth for 25½ ISEFXBIT linen. When the elasticity of the English demand for linen [541] in terms of cloth (the E" QPEQYMQGR curve) is greater OEK than unity, the 305b987c477f781d17bc82b94010de41 new terms of trade are 10 cloth for25½—linen. When the elasticity of the English demand for linen in JFYYJAFPT terms of cloth (the E' curve) is lessthan unity, the new terms of trade are 10 cloth for 25½ + linen. All these results are in 305b987c477f781d17bc82b94010de41 conformity with Mill's findings. As the result of criticisms from W. T. Thornton, and others, Mill, in the third edition (1852) of his Principles, introduced new matter intended to meet the objection that WEESKLSLT 305b987c477f781d17bc82b94010de41 he had failed to demonstrate that, given the reciprocal demands, there was a unique rate of exchange between cloth andlinen at which the condition of equilbrium that the valueof imports should MEKQUJDL equal the value of exports would be met.12 There has been general agreement that this additional material was unsatisfactory and unnecessary. Where at RXBVIMEKN least one of the reciprocal demands is inelastic there may be more than one equilibrium set of terms of trade, 305b987c477f781d17bc82b94010de41 and the problem is then indeterminate.13 Where both 305b987c477f781d17bc82b94010de41 the reciprocal demands are SLL elastic, there must be a unique equilibrium set of terms of trade, which is adequately determined by Mill's original procedure. Marshall. —Marshall's treatment of the relation of reciprocal demand to terms of trade is in the main an exposition and elaboration in geometrical 305b987c477f781d17bc82b94010de41 form of Mill's analysis.14 Marshall invented for this purpose a new type of supply-and-demand diagram, in which the vertical and the horizontal axes 305b987c477f781d17bc82b94010de41 each represent the total quantity of one of the two commodities, thus differing from his domestic-trade diagrams, where only one commodity, and 305b987c477f781d17bc82b94010de41 hi prices, are involved, and where the vertical axis represents price per unit.15 As against the alternative procedure followed here in SSNDJK [542] charts VII, 305b987c477f781d17bc82b94010de41 X, and XII, of making the vertical axis in OOWJM the international-trade diagrams AFXM represent the terms 305b987c477f781d17bc82b94010de41 of trade, equivalent to price, Marshall claims 305b987c477f781d17bc82b94010de41 for his own procedure: first, that it makes the curves of the two countries "symmetrical" and, second, that the alternative procedure would have some (unspecified) advantages, but "this want of LIDCSXJ symmetry would have marred, though it would not have rendered impracticable, the application of the method of diagrams to the more elementary portions of the theory; but in other portions it would have led 305b987c477f781d17bc82b94010de41 to unmanageable complications." 16 The issue is merely one of comparative convenience, and has no other significance. I have found it much more convenient as a rule to follow the BQVESJK .