First published in 1981, this book provides a systematic treatment of the introduction of non-traded and non-competitive intermediate goods in the pure theory of international trade. It presents several well-known propositions in the theory of international trade in terms of some simple and instructive geometry. It also integrates several important insights and author research, providing a thorough survey of the literature in this field. This book has two parts. Part One provides a simple geometric treatment of a model of international trade with non-traded goods, a discussion of well-known propositions, for example Rybczynski and Stolper-Samuelson theorems. Part Two provides an elegant four quadrant diagram to analyse the role of non-competitive intermediate goods in the real theory of trade and several major propositions including theorems on gains from trade and tariff are discussed using this diagram in a first best and distortionary framework.