Final answer:
Gamma, upon specializing according to its comparative advantage in Tea production, will gain by being able to produce more Tea and trade the excess for Sigma's Pots. Comparative advantage allows for greater efficiency and mutual benefits in trade, even when one country has an absolute advantage in all products.
Step-by-step explanation:
If Gamma and Sigma specialize according to their comparative advantage and then trade, Gamma will experience gains in Tea production. Before specialization and trade, Gamma is operating at production possibility B and Sigma at production possibility C.
Assuming Gamma has a comparative advantage in producing Tea, and Sigma in producing Pots, specialization will enable Gamma to produce more Tea than it did before. With specialization, Gamma can trade its excess Tea for Sigma's Pots. Therefore, the gains from specialization and trade in Tea for Gamma will be represented by the ability to attain a higher level of Tea production and the additional utility derived from acquiring Pots through trade, which it could not produce as efficiently.
Comparative advantage is crucial as it allows countries or individuals to produce goods at a lower opportunity cost compared to their trading partners. Therefore, even if a country like a high-income country with an absolute advantage in every production, there can still be gains from trade due to comparative advantages. This is because each country can benefit by specializing in the goods that they produce relatively more efficiently, and then trading for other goods. This principle applies regardless of complete or partial specialization, as illustrated by the example of the United States and Saudi Arabia trading corn for oil, respectively.