Comparative advantage

Absolute advantage:
Economists use the term when comparing the productivity of one person, firm, or nation to that of another. The producer that requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.
Opportunity cost and comparative advantage:
Opportunity cost of some item is what we give up to get that item. The opportunity cost measures the trade-off between the two goods that each producer faces.
Economists uses the term comparative advantage when describing the opportunity cost of two producers.
Comparative advantage and trade:
The gains from specialization and trade are based not on absolute advantage but on comparative advantage. When each person specializes in producing the good for which he or she has a comparative advantage, total production in the economy rises.
The price of the trade:
The principle of comparative advantage establishes that there are gains from specialization and trade, but it leaves open a couple of related questions: what determines the price at which trade takes place? How are the gains from trade shared between the trading parties? The precise answer to these question is beyond , but we can state one general rule: For both parties to gain from trade, the price at which they trade must lie between the two opportunity costs.