Assume that in the United States the opportunity cost of one bottle of wine is four compact discs,while in France the opportunity cost of one bottle of wine is two compact discs.If the terms of trade are three compact discs for one bottle of wine:

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Both countries benefit from trade because the United States can trade three compact discs for one bottle of wine from France, which has an opportunity cost of only two compact discs, meaning the U.S. is better off. France can trade one bottle of wine for three compact discs from the U.S., which has an opportunity cost of four compact discs, meaning France is better off. Both countries can specialize in producing the goods in which they have a comparative advantage, and trade with each other to maximize their overall consumption.

Assume That in the United States the Opportunity Cost of One