England 1 unit wine =1/2unit cloth, Portugal 1 unit wine = 1 unit cloth. This is an example of

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This is an example of Comparative Cost, which refers to the theory that countries should specialize in producing goods for which they have the lowest opportunity cost of production. In this case, England has a comparative advantage in producing cloth (since it only costs them 1/2 unit of wine), while Portugal has a comparative advantage in producing wine (since it costs them the same amount of cloth).

England 1 Unit Wine =1/2unit Cloth, Portugal 1 Unit Wine