Explore BrainMass

The offer curve of a country

Define the "offer curve" (or "reciprocal demand curve") of a country. If an offer curve is drawn as an upward-sloping curve, what is being assumed about the value of the country's elasticity of demand for imports and why does this assumption yield the upward-sloping curve?

Solution Preview

The offer curve shows us the willingness of a country to trade at all possible terms of trade. When good being exported lies along the x axis, and the good being imported along the y axis, an upward slope usually results. For example, if a country produced televisions and apricots, it would set its cost of televisions in terms ...

Solution Summary

The implications of an upward sloping offer curve and underlying assumptions.