Increased Production Causing Increased Price: An Example
Ricardo's theory results in one counterintuitive result: with scarce resources, like land, an increase in the amount produced can actually cause the price of that good to increase.
To illustrate, consider wheat farmers outside of London (numbers are made up, and are not historically accurate, for clarity). Say there are three types of land outside of London in 1759 that can be used to make wheat:
Read more about this topic: Law Of Rent
Famous quotes containing the words increased, production and/or causing:
“As Jerome expanded, its chances for the title, “the toughest little town in the West,” increased and when it was incorporated in 1899 the citizens were able to support the claim by pointing to the number of thick stone shutters on the fronts of all saloons, gambling halls, and other places of business for protection against gunfire.”
—Administration in the State of Ariz, U.S. public relief program (1935-1943)
“From the war of nature, from famine and death, the most exalted object which we are capable of conceiving, namely, the production of the higher animals, directly follows. There is grandeur in this view of life, with its several powers, having been breathed into a few forms or into one; and that, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.”
—Charles Darwin (1809–1882)
“The most stringent protection of free speech would not protect a man in falsely shouting fire in a theater and causing a panic.”
—Oliver Wendell Holmes, Jr. (1841–1935)