Introduction The law of comparative advantage states that two nations or any other parties will benefit from trade, only if there relative cost of productions is different. The two countries can benefit from producing the same products provided there are differences in efficiency of their trading. The law of comparative advantage also refers to the ability of one entity to produce specific goods and services at a minimal marginal cost and opportunity cost than its counterpart (Drabicki, & Akira, 2002, P. 2). For instance, if using advanced technology, one country can produce a bag of sugar and coffee in six hours, while another country with less technology can produce 2 bags of sugar or four bags of coffee in an hour, each country will benefit from trade between them since their internal trade-offs between sugar and coffee are different. The less proficient country has a comparative advantage in producing coffee, therefore it will find it more efficient to produce coffee and trade them off with the country which is more efficient in producing sugar (Bernhofen, & Brown, 2003, P. 3). Without trade, the opportunity cost of producing sugar per coffee is 2; by trading, the cost per sugar can decrease up to 1 coffee depending on the level of trade. Most efficient countries usually experience 1:1 trade offs. The more efficient country has a comparative advantage in sugar and can afford to move some of their labor from coffee production to sugar production and trade more sugar for coffee. Without trade, the cost of producing a bag of coffee was one bags of coffee. By trading these cost can minimized by half depending on the level of trade between these countries. The net gain received by each country is referred to as benefits of trade (Bernhofen, & Brown, 2003, P. 3-4). Origin of the theories of Comparative advantage The theory of comparative advantage originated from the book “On the Principles of Political Economy and Taxation” authored by David Ricardo and was published in 1817. This book highlighted the trade of Wine and clothes between Portugal and England (Drabicki, & Akira, 2002, P. 5). During that era, it was possible to produce both wine and clothes using less labor in Portugal than in England. In addition, the relative cost of producing the two commodities in these countries was different. In England, the producers had difficulty in making wine, and comparatively hard to make clothes. However, in Portugal it was very easy to produce the two commodities. Therefore, although production of clothes in Portugal was viable, it was cheaper to concentrate in making wines and trade it off with clothes from England. On the other hand, England will gain from trading with Portugal since the cost of producing clothes would remain constant while it can get wine at a relatively cheaper price, nearer to the cost of clothe. The book concluded that each country would benefit by specializing in producing goods where they had comparative advantage and trading them with each other (Drabicki, & Akira, 2002, P. 5-6). Sources of comparative advantage The main sources of comparative advantage are technology and factor endowment. However, there are also other factors inc