Argonia and Selenia specialize in the production of medical equipment and rice respectively. Argonia exports medical equipment to Selenia, which in turn exports rice to Argonia. According to the theory of comparative advantage, this mutually beneficial trade relationship is an example of

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The theory of comparative advantage suggests that when countries specialize in producing goods where they have a lower opportunity cost, trade can be mutually beneficial, resulting in a positive-sum game where both parties gain.

Argonia and Selenia Specialize in the Production of Medical Equipment