PAPM 1000 Chapter 7: Chapter 7 – The Classical School – David Ricardo

• School: Carleton University
• Department: Public Affairs and Policy Management
• Course: PAPM 1000
• Professor: Marc Andre Gagnon

Document Summary

When land of the third quality is taken into cultivation, rent immediately commences on the second, and it is regulated as before, by the difference in their productive powers. At the same time, the rent of the second, by the difference between the produce which they yield with a given quantity of capital and labor. The theory of exchange value and relative prices: ricardo was concerned with relative values, not with absolute values; he wanted to discover the basis for the ratio of exchange between commodities. 3: market prices deviate from value or natural price because of accidental or temporary fluctuations of supply and demand. Rather, this wage depended on the habits and customs of the people and what they consider to be minimum acceptable subsistence: profits, price movements influence rates of profit that in turn direct the flow of capital. If price rise, more money will be required to sell a given quantity of goods.