SmithandRicardoontrade幻灯片.pptxVIP

Smith and Ricardo on trade;ENTER ADAM SMITH--- THE CLASSICAL WITH SEVERAL BOOKS, BUT MAINLY THE WEALTH OF NATIONS – 1776 SMITH CRITICIZED THE MERCANTILISTS PHILOSOPHERS, SUGGESTING THERE ARE GAINS TO TRADE ABSOLUTE ADVANTAGE IDEA --- ABSOLUTE ADVANTAGE IS THE ABILITY OF A NATION TO PRODUCE A GOOD USING FEWER INPUTS THAN IS POSSIBLE ANYWHERE ELSE IN THE WORLD ABSOLUTE ADVANTAGE BECOMES A BASIS FOR TRADE AND A BASIS FOR PROJECTING TRADE PATTERNS;THE IDEA OF ABSOLUTE ADVANTAGE ADAM SMITH ---- LOWEST INPUT PER OUTPUT IN THE WORLD;NATION A HAS ABSOLUTE ADVANTAGE IN SOYBEANS NATION B HAS ABSOLUTE AD