Question

Why do countries trade with each other ? Critically examine the ricardian theory of comparative advantage in this regard.

Answer 1

Countries on their own do not have all available resources or capacity to satisfy their needs and wants, by so doing they turn to trade with each other. By exploiting their scares home resources so hard, countries can make/produce a  surplus and trade this surplus for what they need. By implementing Ricardo's theory on this regard, countries turn to produce at a low opportunity cost then  sell what they are able to produced at a lower price in-order to realize a strong sales margin than their counterpart.