Which of the following statements best explains the relationship between gains from trade and the principles of absolute and comparative advantage in international trade theory?

Gains from trade occur when countries specialize in producing goods where they have a comparative advantage, meaning they can produce those goods at a lower opportunity cost than others. In contrast, absolute advantage refers to the ability of a country to produce more of a good using the same resources compared to another country. For example, if Country A can produce 10 cars using the same resources that Country B uses to produce 5 cars, Country A has an absolute advantage in car production. However, if Country A is better at producing cars but Country B has a lower opportunity cost for producing wheat, then both countries can benefit by specializing and trading. By focusing on what they do best, countries can increase their overall output and enjoy more goods than they would by producing everything on their own.