Question

Which of the following is not correct about the offer curves?

• A. Offer curves were devised and introduced in International Economics by Marshall and Edgeworth.
• B. The offer curve of a nation shows the nation's willingness to import and export at various relative commodity prices.
• C. The offer curve of a nation can be derived from the nation's production frontier.
• D. Offer curve of a nation bends towards the axis measuring the commodity of its comparative disadvantage.

Hint:

Offer curves are used to analyze trade between countries and represent the willingness to trade based on relative commodity prices.

Answer 1

The Correct Option is C

Step 1: Understanding the offer curve.
An offer curve shows the amounts of exports a country is willing to offer for different amounts of imports at different relative prices. It is a tool in international trade to analyze the terms of trade.

Step 2: Analysis of options.
- (A) Offer curves were devised and introduced in International Economics by Marshall and Edgeworth: This is correct. The offer curve concept was developed by these economists.
- (B) The offer curve of a nation shows the nation's willingness to import and export at various relative commodity prices: This is correct. It represents the trade-off between imports and exports for a country.
- (C) The offer curve of a nation can be derived from the nation's production frontier: This is incorrect. The offer curve is not directly derived from the production frontier but rather from preferences and trading possibilities.
- (D) Offer curve of a nation bends towards the axis measuring the commodity of its comparative disadvantage: This is correct. The curve shows how a country is willing to trade more of the commodity in which it has a comparative disadvantage.

Step 3: Conclusion.
The incorrect statement is (C), as the offer curve is derived from preferences, not directly from the production frontier.