Final answer:
Two conditions for establishing competitive advantage with a resource are that it must be produced and be usable to create other goods and services. Countries with absolute or comparative advantages can engage in trade to optimize efficiency and productivity.
Step-by-step explanation:
The two conditions for a resource or capability to establish competitive advantage are:
- The resource must have been produced.
- The resource can be used to produce other goods and services.
In the context of international trade, a country has an absolute advantage when it can produce a good using fewer resources compared to another country. Conversely, a country has a comparative advantage when it can create a particular good or service in a more cost-effective manner than another, which means producing at a lower opportunity cost. Countries utilize these advantages to engage in gain from trade, leveraging specialization and trade to consume more than they could produce on their own. Furthermore, the principles of intra-industry trade and splitting up the value chain highlight the complexities of modern international trade, where different stages of producing a good can happen in different geographic locations.