We can predict the range of possible trade prices as being between each trader's opportunity cost. Provide a concrete example. Absolute advantage refers to a situation in which one trading party is generally more productive than the other, and thus can produce a given output with fewer inputs. Tariffs are frequently used to protect a domestic industry from foreign competition that can operate at a lower opportunity cost. Tariffs can be used against a country that has created a comparative advantage by having few health, labor, safety, or environmental protections, thus lowering their costs of production.
Tariffs reduce the volume of imports and raise domestic prices.
Quotas are a maximum amount of a good that can be imported into a country. They work like tariffs in reducing the quantity imported and raising domestic prices. We had voluntary quotas for Japanese cars in the 1980s. Politically, domestic producers often have the power to force governments to erect tariff or quotas as protectionist measures to raise domestic profits. Exporting firms that suffer because of tariffs then lobby their government to erect similar tariff or quota barriers.