Final answer:
A country specializes in producing certain goods or services where it has a comparative advantage, leading to more effective production. Specialization is influenced by natural resources, expertise, and geography, enabling countries to benefit from increased efficiency and gains from trade.
Step-by-step explanation:
When a country specializes in producing a certain good or service, it essentially focuses its resources on producing items that it can manufacture most efficiently. This could be due to its natural endowments, like favorable geography, or due to acquired advantages such as levels of expertise or technological advancements. For example, it is easier to grow wheat in North Dakota due to the climate, while Florida's climate is well-suited for tourism and hospitality.
Specialization can lead to a number of benefits for a country. Harnessing a comparative advantage, which occurs when a country can produce a good at a lower opportunity cost than others, allows for more effective production and potential for economic growth. Through trade, countries can then export these specialized goods in exchange for goods that other countries have specialized in, leading to efficiency gains from trade liberalization.