Jamal and Keisha each earn money by washing cars and mowing lawns.

Question

Jamal can mow 4 lawns or wash 8 cars in one day. Keisha can mow 3 lawns or wash 9 cars in one day. They both charge $25 for each lawn and $15 for each car.

The chart shows their production after 3 days.

A 3-column table has 2 rows. The first column has entries Lawns, cars. The second column is labeled Jamal with entries 12, 24. The third column is labeled Keisha with entries 9, 27.

Jamal and Keisha are considering entering into an agreement to trade tasks.

How can specialization of labor benefit Jamal and Keisha? Check all that apply.

Jamal can specialize in washing cars, because he has the comparative advantage.
Keisha can specialize in washing cars, because she has the comparative advantage.
Specialization allows them to collectively mow 3 more lawns and wash 3 more cars every three days.
Specialization allows them to collectively mow 12 more lawns and wash 27 more cars every three days.

Answer 1

To determine how specialization of labor can benefit Jamal and Keisha, let's analyze their productivity and comparative advantages.

Productivity:

1. Jamal can:

   • Mow 4 lawns in a day or wash 8 cars in a day.
   • Therefore, in 3 days, he can mow \(3 \times 4 = 12\) lawns or wash \(3 \times 8 = 24\) cars.

2. Keisha can:

   • Mow 3 lawns in a day or wash 9 cars in a day.
   • Therefore, in 3 days, she can mow \(3 \times 3 = 9\) lawns or wash \(3 \times 9 = 27\) cars.

Earnings Calculation:

• For Lawns:

  • Jamal mows 12 lawns (earns \(12 \times 25 = 300\) dollars).
  • Keisha mows 9 lawns (earns \(9 \times 25 = 225\) dollars).
  • Total earnings from mowing: \(300 + 225 = 525\) dollars.

• For Cars:

  • Jamal washes 24 cars (earns \(24 \times 15 = 360\) dollars).
  • Keisha washes 27 cars (earns \(27 \times 15 = 405\) dollars).
  • Total earnings from washing: \(360 + 405 = 765\) dollars.

Comparative Advantage:

• Jamal's opportunity cost for washing cars:

  • He can wash 8 cars or mow 4 lawns, so washing 1 car costs him \(0.5\) lawns.

• Keisha's opportunity cost for washing cars:

  • She can wash 9 cars or mow 3 lawns, so washing 1 car costs her \(0.333\) lawns.

Since Keisha has a lower opportunity cost for washing cars, she has a comparative advantage in washing cars. Conversely, Jamal has a comparative advantage in mowing lawns since he gives up fewer cars per lawn mowed compared to Keisha.

Analysis of Options:

• Jamal can specialize in washing cars, because he has the comparative advantage. (False: Keisha has the comparative advantage in washing cars.)
• Keisha can specialize in washing cars, because she has the comparative advantage. (True: Keisha has the comparative advantage.)
• Specialization allows them to collectively mow 3 more lawns and wash 3 more cars every three days. (Need more analysis, but seems incorrect based on their current productivity.)
• Specialization allows them to collectively mow 12 more lawns and wash 27 more cars every three days. (This is also incorrect based on their current productivity; it is generally assumed that specialization leads to a more optimal production level but does not add this much extra output unless specific conditions of trade are met.)

Conclusion:

The correct statement regarding their potential trade and specialization is:

• Keisha can specialize in washing cars, because she has the comparative advantage.

This would allow them to maximize their collective output efficiently based on their strengths.