Ricardian economics

[1][2] At the age of 27, he read An Inquiry into the Nature and Causes of Wealth of Nations by Adam Smith and was energised by the theories of economics.

The law of diminishing returns states that if you add more units to one of the factors of production and keep the rest constant, the quantity or output created by the extra units will eventually get smaller to a point where overall output will not rise ("diminishing returns").

In the Principles of Economics, Ricardo states that comparative advantage is a specialization technique used to create more efficient production (52) and describes opportunity cost between producers (53).

With perfect competition and undistorted markets, countries tend to export goods in which they have a comparative advantage.

According to The Fortune Encyclopedia of Economics, Ricardo's idea of comparative advantage is "the main basis for most economists' belief in free trade today" (827).

Ricardo's theory on economic rent consisted mostly of an agricultural model featuring farmers and landowners.

To Ricardo, value had much to do with the cost of production, which included wages and profit (St. Clair 27) and how much you paid a worker affected the price you put on the item.

Ricardo addressed many of the issues we face today in our economic world, such as minimum wage and rent (Fusfeld 325).