A country has an absolute advantage in those products in which it has a productivity edge over other countries; it can produce more of a product. Countries that specialize based on comparative advantage gain from trade

If other countries specialize in the area of their comparative advantage as well and trade, the highly productive country is able to benefit from a lower opportunity cost of production in other countries A country has a comparative advantage when it can produce a good at a lower cost in terms of other goods.

absolute advantage — when one country has more resources, more productive resources, or a natural endowment to produce a good compared to another country; when a country can produce more of a good…. gain from trade — a country that can consume more than it can produce as a result of specialization and trade. highly productive country — able to benefit from a lower opportunity cost of production in other countries. value chain — how a good is produced in stages.