If Country A can produce 10 units of cloth or 5 units of wine, while Country B can produce 6 units of cloth or 3 units of wine, which country has a comparative advantage in producing wine?

To determine which country has a comparative advantage in producing wine, we need to look at the opportunity cost of producing wine in each country. In Country A, if it chooses to produce 5 units of wine, it gives up the chance to make 10 units of cloth, meaning the cost of producing 1 unit of wine is 2 units of cloth. In Country B, producing 3 units of wine means it gives up 6 units of cloth, so the cost of 1 unit of wine is 2 units of cloth as well. Since both countries have the same opportunity cost for wine, neither has a clear comparative advantage over the other; they are equally efficient in producing wine. However, if they specialize based on their absolute advantages, they can trade to benefit both countries.