One of the first economists to understand and explain the notion that specialization and trade depend on comparative and NOT absolute advantage was
A) Adam Smith.
B) Edwin Mansfield.
C) John Maynard Keynes.
D) Thomas Malthus.
E) David Ricardo.

Question

Quizplus · Accepted Answer

David Ricardo introduced the idea of comparative advantage in his book "On the Principles of Political Economy and Taxation" in 1817. He explained that countries should specialize in producing goods in which they have a lower opportunity cost than others and then trade with other countries for goods in which they have a higher opportunity cost. This concept challenged the idea that countries should focus on producing goods in which they have an absolute advantage.

One of the First Economists to Understand and Explain the Notion