Why do countries choose to import some goods and export other goods? One of the reasons for the existence of an international economy is that some goods for some nations have a higher opportunity cost to produce than other goods. For example, it may be very cheap for the United States to produce blue jeans, so it makes sense to sell jeans to other nations, and to import the more costly (for the U.S.) sheep wool from the United Kingdom. In contrast, the United Kingdom may chose to export the wool that it has in excess, and import goods that it finds prohibitively costly to manufacture, in contrast to wool. ("Benefits of Specialization and Trade," Notes on international trade and public policy, 2006).

             One way to understand the benefits of exporting and importing goods is to think of two farmers living side by side. A farmer could try to raise beef and pork, harvest corn, and make only enough foodstuffs for the family. Or he could deploy his entire farm for the production of an excess of corn, sell the corn, and buy a much greater variety of goods at less cost to himself from other specialized farmers. Farmer A's farm may be more capable of producing cheap pigs for pork, for example, rather than the cheap corn that is easy to produce on Farmer B's farm. This means that Farmer A and B can produce:.

             Farmer A=60 bushels of corn, no pigs.

             Farmer B=60 head of hogs, no corn.

             Or the two farmers can balance their production and sell to other farmers nationwide, raising only the goods they need for their own families or the local economy. .

             Farmer A=50 bushels of corn, 5 pigs.

             Farmer B=50 head of hog, 10 bushels of corn.

             The opportunity cost of the first scenario would be 60 pigs to Farmer A and 60 bushels of corn for B, while in the second each farmer would sacrifice 10 units of his specialized crop for the cost of producing some amount of his cash or export crop.

             The climate and terrain of some nations, and a nation's manufacturing capabilities determine what goods will be cheaper for a nation to produce on a mass scale than other goods.