Comparative Advantage in Capital-Intensive Production: Which Country Benefits?

The country with a relatively abundant supply of capital will have a comparative advantage in the production of good 'S'. This is because capital-intensive production requires a higher proportion of capital to labor, and if a country has a relatively larger supply of capital, it can produce good 'S' more efficiently than a country with a relatively smaller supply of capital. On the other hand, the country with a relatively abundant supply of labor will have a comparative advantage in the production of good 'T', as labor-intensive production requires a higher proportion of labor to capital. Therefore, the country's factor endowments determine its comparative advantage in the production of different goods.