France can produce 50 pounds of cheese or 25 bottles wine The US 40 8 which country should specialize in and wine?

To determine which country should specialize in cheese and wine, we need to calculate the opportunity cost of producing each good in both countries. The opportunity cost of producing a good is the value of the other good that could have been produced instead.

In France, the opportunity cost of producing a pound of cheese is 1/2 bottle of wine (since France can produce 2 bottles of wine for every pound of cheese).

In the US, the opportunity cost of producing a bottle of wine is 2/5 pound of cheese (since the US can produce 2.5 pounds of cheese for every bottle of wine).

Comparing the opportunity costs, we see that France has a lower opportunity cost of producing cheese, while the US has a lower opportunity cost of producing wine. This means that France should specialize in producing cheese, and the US should specialize in producing wine.