Gains from trade refer to the benefits that result from individuals, countries, or firms engaging in voluntary exchange. Through specialization and trade, parties can obtain goods and services they desire at a lower opportunity cost than if they were producing everything themselves.
Related terms
Trade-offs: The choices individuals or societies make when allocating scarce resources between competing uses.
Division of Labor: The process where work is divided into specialized tasks performed by different individuals or groups.
Terms of Trade: The ratio at which goods or services from one country can be exchanged for goods or services from another country.