David Ricardo - 1817 - Comparative Advantage explains trade based on fixed "factor" differences between countries (meaning different opportunity costs). Fixed differences in land means that price increases allow land owners with less productive land to enter. Higher prices and inelastic supply mean more productive land produces "rents" - profits above the costs of inputs. For us, the fundamental insights are: o Resources are heterogeneously distributed o Some resources are more valuable than others o Resources are not perfectly mobile (inelastic in supply) These are the assumptions of the RBV