International Trade

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Comparative advantage is an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners. A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins.

Imports

Exports

Tariffs

Tariffs are import-specific taxes.

International trade is beneficial for society, because in the case of exports, firms can specialise to produce things that they have comparative advantage at, therefore making producers better off. In the case of imports it allows to import things that firm's bad at producing, therefore making consumers better off. And in both cases, the gain to the winning party exceeds the loss to the losing party.