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Comparative advantage drives specialization in trade from "summary" of International Economics by Robert Carbaugh
The concept of comparative advantage lies at the heart of international trade theory. It refers to the ability of a country to produce a good or service more efficiently than another country, using fewer resources. When countries specialize in producing goods and services in which they have a comparative advantage, they can trade with other countries to obtain goods and services that they cannot produce as efficiently themselves. This leads to increased overall efficiency and welfare for all countries involved in the trade. Specialization in trade occurs because countries can produce certain goods and services at a lower opportunity cost than others. The opportunity cost of producing a good or service is the value of the next best alternative t...
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