how might opportunity cost help to explain tha pattern of international trade?

Why might an economist look at hundreds of cars moving along an assembly line and say there is an example of scarcity

Opportunity cost plays a crucial role in explaining the pattern of international trade. International trade occurs when countries specialize in producing goods and services in which they have a comparative advantage. Comparative advantage is the ability to produce a good or service at a lower opportunity cost than another country.

To understand how opportunity cost explains the pattern of international trade, we need to consider the concept in the context of different goods and countries. Let's assume there are two countries: Country A and Country B, and two goods: Good X and Good Y.

Opportunity cost refers to the sacrifice of producing one good over another. It is calculated by comparing the output of one good to the output of another good that could have been produced using the same resources.

In this scenario, let's say Country A can produce both Good X and Good Y, but at a higher opportunity cost for producing Good X compared to Country B. Conversely, Country B can produce both goods, but at a higher opportunity cost for producing Good Y compared to Country A.

Given this comparative analysis, it is beneficial for Country A to specialize in producing Good Y, utilizing its resources more efficiently. Similarly, Country B should specialize in producing Good X, as it can produce it more efficiently.

This specialization and trade between the two countries allow them to optimize their resource allocation, producing more output collectively compared to if each country attempted to produce both goods. By focusing on their respective comparative advantages, both countries can benefit from trade.

So, opportunity cost helps explain the pattern of international trade by highlighting the benefits of specialization and comparative advantage. Countries engage in trade to harness the advantages offered by producing goods with lower opportunity costs, resulting in increased economic efficiency and mutual gains.