Chillerston and Clientsville are two countries using capital (K) and labour (L) to produce steel and tea. Chillerston is a capital abundant country and Clientsville is a labour abundant country. Steel production is capital intensive and tea production is labour intensive. There is incomplete specialization in both countries.

Using the hypothetical scenario above, explain and show that factor endowments determines comparative advantage and therefore that there are gains to be made from trade between the two countries.