if country A is an agricultural country and country B has many cities and factories it would make sense for
- country A to specialize in growing wheat
- country B to specialize in making tractors
Both these countries have what is referred to as a competitive advantage due to their geographical features.
Agricultural country tend to be able to produce agricultural product in cheaper price while countries that have many cities tend to be able to produce manufactured goods on cheaper price. After focusing each of their own products, country A and Country B could conduct a trade so both their needs can be fulfilled.
