Final answer:
According to Adam Smith, countries trade when they enjoy a comparative advantage over other countries in the production of a given product.
Step-by-step explanation:
According to Adam Smith, countries trade when they enjoy a comparative advantage over other countries in the production of a given product. This means that if a country can produce a product at a lower cost in comparison to other countries, it should specialize in producing that product and trade with other countries to get products that they cannot produce as efficiently.
For example, if Country A can produce a car at a lower cost than Country B, and Country B can produce a computer at a lower cost than Country A, it would be beneficial for both countries to specialize in producing the product they have a comparative advantage in and trade with each other.
By focusing on their respective comparative advantages, countries can maximize productivity and efficiency, leading to gains from trade for all participating nations.