Excerpt from Term Paper:

......3. The community indifference curve reflects the combination of goods (quantity) to which the consumer is indifferent. In other words, the points on each curve render the same utility for the consumer. The curves are concave and downward slopping. The negative slope suggests that the increase in consumption of one good (X) will increase overall satisfaction if its not offset by a decrease in consumption of the other good (Y). Preferences are depicted upward on the right side of the quadrant the more to the right, the higher the preference. If the consumer is indifferent between the consumption of 2 goods, then the curves coincide
4. Fig. 3 Input table
| |X |Y |
|I |5 |8 |
|II |2 |10 |
|World |7 |18 |



If the countries trade, the exchange price will be one tone of one unit of Y for 7/18 units of X. Is opportunity cost of producing one unit of X is 8/5 and IIs opportunity cost of producing one unit of X is 5, meaning that I has a comparative advantage in producing X goods. Is opportunity cost of producing one unit of Y is 5/8=0.625 and IIs opportunity cost of producing

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