Final answer:
Comparative advantage is a concept in economics that determines the benefits of specialization and trade. When countries specialize in producing goods and services in which they have a comparative advantage, they can trade with other countries and enjoy increased efficiency and productivity.
Step-by-step explanation:
Comparative advantage is a concept in economics that refers to the ability of a country or individual to produce a particular good or service at a lower opportunity cost compared to others. It is a key factor in determining the benefits of specialization and trade. When countries specialize in producing goods and services in which they have a comparative advantage, they can trade with other countries and enjoy the benefits of increased efficiency and productivity.
For example, let's say Country A can produce both cars and computers more efficiently than Country B. However, Country B has a lower opportunity cost of producing cars compared to computers, while Country A has a lower opportunity cost of producing computers compared to cars.
In this case, it makes economic sense for Country A to specialize in producing computers and trade them with Country B, which specializes in producing cars. Both countries will be able to achieve a higher level of output and consumption by focusing on their comparative advantages and engaging in trade.