If Country A specializes in producing cars while Country B specializes in cocoa, what is the underlying reason for this specialization based on their production capabilities?

The reason Country A specializes in producing cars while Country B specializes in cocoa is based on their production capabilities and resources. Each country has different strengths; for instance, Country A may have better technology, skilled workers, and resources for car manufacturing, making it more efficient at producing cars than cocoa. On the other hand, Country B might have the right climate and soil to grow cocoa beans, allowing it to produce cocoa more effectively than cars. This situation is known as comparative advantage, where each country focuses on what it can produce most efficiently compared to the other. For example, if Country A can make 10 cars with the same resources it takes Country B to produce 5 tons of cocoa, it makes sense for both countries to specialize and trade, benefiting from each other's strengths.