David Ricardo made the case that countries should specialize in the production of goods they were comparatively better at, given available land, labour, and capital. This was known as the _________.
A) theory of comparative advantage
B) theory of competitive advantage
C) theory of the invisible hand
D) capability theory
E) economic nationalism

Question

Quizplus · Accepted Answer

David Ricardo is best known for his theory of comparative advantage, which argues that countries should specialize in producing goods for which they have a lower opportunity cost compared to other countries. This specialization can lead to increased efficiency and mutual benefits from trade.

David Ricardo Made the Case That Countries Should Specialize in the Production