When countries specialize in producing and exporting the goods that they produce at a lower relative cost than other countries, the distribution of the gains from trade:

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The distribution of the gains from trade depends on the terms of trade, which are determined by how the relative costs of production (or opportunity costs) compare between countries. When the terms of trade are set between the countries' domestic opportunity costs, it allows both countries to benefit from trade, but the exact distribution of these benefits depends on the specific terms agreed upon.

When Countries Specialize in Producing and Exporting the Goods That