In the classic example, Portugal's opportunity cost for producing wine in terms of lost potential to produce cloth is less than England's opportunity cost, in terms of wine, to produce cloth. Thus, even if one country can produce both cloth and wine at a lower absolute cost, the countries will both 
In the classic example, Portugal's opportunity cost for producing wine in terms of lost potential to produce cloth is less than England's opportunity cost, in terms of wine, to produce cloth. Thus, even if one country can produce both cloth and wine at a lower absolute cost, the countries will both benefit if England produces cloth, Portugal produces wine, and the two states trade. For 10 points—name this situation, proposed by David Ricardo as the method by which free international trade allocates resources efficiently.
In the classic example, Portugal's opportunity cost for producing wine in terms of lost potential to produce cloth is less than England's opportunity cost, in terms of wine, to produce cloth.
{comparative advantage} [do not accept “absolute advantage”]