Because the Ricardian theory of comparative advantage was based only on a nation's demand conditions,it could not fully explain the distribution of the gains from trade among trading partners.

Question

Quizplus · Accepted Answer

The Ricardian theory of comparative advantage is based on differences in labor productivity, not on demand conditions. It explains trade benefits through opportunity costs and relative efficiency, not demand.

Because the Ricardian Theory of Comparative Advantage Was Based Only