What did Ricardo claim determined the value of a commodity?
The amount of gold it was worth
The labor necessary for its production
The price it sold for on the market
The amount of resources required to make it
Answer
The value of a commodity is determined by the amount of labor necessary to produce it. This concept, known as the labor theory of value, was proposed by the classical economist David Ricardo. He argued that the value of a good or service is directly proportional to the labor time required to produce it, regardless of its utility or the supply and demand in the market.
The Ricardo Revolution: Mastering David Ricardo's Economic Legacy
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