The basis of the benefits of specialization is:

A) comparative advantage.
B) absolute advantage.
C) the size of the country.
D) identical production costs between two countries.
E) agreeable terms of trade.

Comparative Advantage

The ability of a country, individual, company, or region to produce a particular good or service at a lower opportunity cost than others.

Absolute Advantage

The ability of a country or firm to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including materials, labor, and overhead.