In the context of international trade, which of the following scenarios best illustrates the concept of comparative advantage and its relationship with terms of trade and trade-offs?

Comparative advantage is when a country can produce a good at a lower opportunity cost than another country. This means that even if one country is better at making everything (absolute advantage), it still benefits from specializing in what it can produce most efficiently. For example, if Country A can produce both wine and cheese but is much better at making wine, while Country B is not as good at making wine but can produce cheese more efficiently, they can trade. Country A should focus on wine, and Country B should focus on cheese, allowing both to enjoy more of both products than if they tried to make everything themselves. This relationship shows how countries can benefit from trading based on their strengths, leading to better terms of trade and fewer trade-offs.