FranceUnited States (U.S.)

WineCheeseWineCheese

(Bottles)(Pounds)(Bottles)(Pounds)

08015

16112

2429

3236

4043

50

a) Does France or the U.S. have an absolute advantage in either product?Explain.

b) Does France or the U.S. have a comparative advantage in either product?Explain and provide relevant quantitative details.

c) If France is currently producing 1 bottle of wine and 6 pounds of cheese, and the U.S. is currently producing 3 bottles of wine and 6 pounds of cheese, would both countries be better off by specializing in one good and trading (based on comparative advantage, of course)?{Assume the trade is 3 bottles ofwine for 7.5 pounds of cheese.}Provide relevant details.

d) Are there any potential political ramifications if specialization and trade take place?Elucidate.