Adam smith and the invisible hand (2)

in the wealth of nations,smith explained not only the critical role the market played in the accumulation of a nation,s wealth but also the nature of the social order that it achieved and helped to maintain. smith applied his ideas about economic activity within a country to specialization and exchange between countries.he concluded that countries should specialize in and export those commodities in which they had an absolute advantage and should import those commodities in which the trading partner had an absolute advantage.each country should export those commodities it produced more efficiently because the absolute labor required per unit was less than that of the prospective trading partner.consider the two-country,two-commodity framework shown in table 1.assume that a labor theory of value is employed.