In many introductory economic classes, David Ricardo is well-known for his contribution to trade theory. His legacy, the theory of comparative advantage, explains how, even with resource constraint, prosperity can be attained via international trade. It states that “country A” should produce good A (then trade good A with country B for good B) if the amount of good B it has to give up to produce a unit of good A is lower than the amount of good B that country B has to give up to do the same.
In many introductory economic classes, David Ricardo is well-known for his contribution to trade theory. His legacy, the theory of comparative advantage, explains how, even with resource constraint, prosperity can be attained via international trade. It states that “country A” should produce good A (then trade good A with country B for good B) if the amount of good B it has to give up to produce a unit of good A is lower than the amount of good B that country B has to give up to do the same.