Arrange the following steps in the correct sequence to determine which country has a comparative advantage in producing wheat and cloth: A) Calculate the opportunity cost of producing wheat in terms of cloth for both countries. B) Identify which country has a lower opportunity cost for each good. C) Determine the total production capabilities of both countries for wheat and cloth. D) Conclude which country should specialize in which good based on opportunity costs.

To determine which country has a comparative advantage in producing wheat and cloth, you first need to know how much of each good each country can produce. This is done by calculating their total production capabilities for both wheat and cloth. After that, you calculate the opportunity cost of producing wheat in terms of cloth for both countries, which tells you how much cloth they give up to produce more wheat. Next, you identify which country has a lower opportunity cost for each good; this shows which country is better suited to produce that good. Finally, you conclude which country should specialize in which good based on the opportunity costs, allowing each country to benefit from trade.