Then the country should trade with the rest of the world for the other commodities they need. He felt that if countries would do this, the total world production would be greater. Absolute advantage the ability to produce something with fewer resources than other producers. Barter way to exchange or conduct transactions. No money changes hands.
Barter works best in situations where there is little specialization and few types of goods.
Division of labor organizing production of a single good into separate tasks. It allows people to specialize. Specialization of labor focusing an individual s efforts on a particular product or a single task. Efficiency best explained through the theory of Pareto Efficient Allocation Pareto Efficient Allocation developed by the Italian economist Vilfredo Pareto. Pareto was a pioneer in the development in the theories of exchange.