The theory of comparative cost advantage is associated with

Step 1: Analyze the question The question asks which economist is linked to the theory of comparative cost advantage, which is a basic idea in international trade.

Step 2: Explain the concept The theory of comparative cost (or comparative advantage) says a country should specialize in producing goods that it can produce at a lower opportunity cost than other countries. It should then trade for the other goods it needs. Both countries gain, even if one of them is more efficient at producing everything.

Step 3: Go through the options

• A. Adam Smith: He is known for the theory of absolute advantage in The Wealth of Nations (1776), the division of labour, and the "invisible hand". It is not the same as comparative advantage.
• B. Reverend Thomas Malthus: He is known for the theory of population. He argued that population grows geometrically while food supply grows arithmetically.
• C. Professor "trum fisher" (probably Irving Fisher): He is known for the quantity theory of money and the equation of exchange, MV = PT.
• D. David Ricardo: He developed the law of comparative cost advantage in Principles of Political Economy and Taxation (1817).

Step 4: Answer The correct answer is D. David Ricardo.

Quick example: Suppose Nigeria can produce either 10 units of cocoa or 5 units of cloth, while Ghana can produce either 4 units of cocoa or 4 units of cloth. Ghana may be less efficient in cocoa, but it gives up less cloth for each unit of cocoa produced elsewhere. So the countries can still gain by specializing according to opportunity cost and then trading.

Exam tip: Remember the pairs: Smith = Absolute advantage, Ricardo = Comparative advantage, Malthus = Population, Fisher = Quantity theory of money. A simple memory link is "Ricardo = Relative (comparative) cost", since both start with R-sounds.