Ricardo, David (1772–1823)

Definition

Economics

  • successful English stockbroker who retired to write on economics, in particular on the theory of the distribution of goods to various classes of society, basing himself mainly on agricultural produce. He showed that increasing factors of production led to increased output until it reached a certain level, after which output fell proportionately (the law of diminishing returns). He also elaborated the theory of comparative costs as the basis for international trade (that goods will only be sold abroad if they are cheaper or need fewer units of a factor of production to produce than locally produced goods).
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