Homework #5 - Intro to International Relations Due on...

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Intro to International Relations Due on 2-18-08 Homework #5 1. David Ricardo’s economic views and theories were based off the idea of absolute advantage—or a situation in which one country is more efficient than others in producing a certain good. His theory was that one country; even though it has an absolute advantage in let’s say coal could still beneficially trade with other countries as long as they had their own absolute advantage but in another field, let’s say oil. This would lead to an equal and beneficial trading scheme for both parties involved. It is also possible that one of the countries involved in the trading has an absolute advantage in both categories of trading, but because of the comparative advantage within both countries—or the cost in man hours to produce one unit of the said product is different in the two countries and thus they can still come to an economic deal involving the two products. Ricardo, although an economic genius during his time received many of his
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This note was uploaded on 03/17/2008 for the course PL SC 014 taught by Professor Gartzke during the Spring '99 term at Pennsylvania State University, University Park.

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Homework #5 - Intro to International Relations Due on...

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