Countries engaged in international trade typically specialize in production based on b) comparative advantage. Comparative advantage occurs when a country can produce a good or service at a lower opportunity cost than another country. This concept encourages countries to focus on producing what they can make most efficiently and to trade for goods that other countries produce more efficiently.
For example, if Country A is better at producing wine and Country B is better at producing cloth, then Country A should specialize in wine while Country B focuses on cloth. By trading, both countries can enjoy a greater quantity and variety of goods than if each tried to produce everything independently.