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Ricardo's theory of comparative advantage was of limited relevance to the real world since it assumed that labor was only one of several factors of production.
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Compared to Ricardian trade theory, modern trade theory provides a more general view of comparative advantage since it is based on all factors of production rather than just labor.
Constant opportunity costs suggest that the relative cost of producing one product in terms of the other will remain the same no matter where a nation chooses to locate on its production-possibilities schedule.
There are two explanations of constant opportunity costs; (1) factors of production are imperfect substitutes for each other; (2) all units of a given factor have different qualities.
With increasing opportunity costs, a nation totally specializes in the production of the commodity of its comparative advantage; with constant opportunity costs, a nation partially specializes in the production of the commodity of its comparative advantage.
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