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1.1.3 relative advantage theory of David Ricardo David Ricardo pointed out that in cases where a country has an absolute advantage (or have the absolute disadvantage) in the production of all the items compared with another country, the trade between the two countries can still occur and bring benefits to both parties. He has brought a new concept of the principle of comparative advantage, one of the greatest principles of economics. This principle had existed during the last century, and it will still continue to exist and retains its value. Ricardo said that when comparative advantage, a country will gain benefits in trade whether countries that have or do not have an absolute advantage in the production of goods. Different countries have different comparative advantages and by the export of goods that their country has a comparative advantage, every country can obtain the goods that you need with costs lower than in case they have to manually produce retrieved
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