Final answer:
The ideas of comparative and absolute advantage in international trade explain why some countries can produce certain goods more efficiently or at higher quality due to factors like labor costs or technology. Specialization based on these advantages leads to gains from trade.
Step-by-step explanation:
The concept in question is related to comparative advantage and absolute advantage, which are cornerstone ideas in international trade and economics. When a country can produce a good using fewer resources compared to another country, it is said to have an absolute advantage.
It becomes more productive compared to other countries. However, a comparative advantage exists when a country can produce a particular good at a lower opportunity cost than others. By specializing and trading based on comparative advantages, countries can enjoy a gain from trade, which allows them to consume more than what they could produce independently.
An example of this is Apple Corporation, where the iPhone's design and engineering are done in the United States, while assembly occurs in China and components are produced in Korea. Each country specializes in segments where they have a relative efficiency.