If Karl can wash 6 cars or wax 3 cars per hour, while Tom can wash 3 cars or wax 3 cars per hour, _____.

Question

the opportunity cost of Karl washing a car is two waxed cars

the opportunity cost of Tom washing a car is two waxed cars

Karl has the comparative advantage in waxing cars

Tom has the comparative advantage in waxing cars

Answer 1

To determine the opportunity costs and comparative advantages of Karl and Tom, we can analyze their production capabilities.

Karl:

• Can wash 6 cars per hour.
• Can wax 3 cars per hour.

Opportunity Cost for Karl:

• 1 car washed = 3 cars waxed / 6 cars washed = 0.5 cars waxed.
• Therefore, the opportunity cost of washing one car is 0.5 waxed cars.

Tom:

• Can wash 3 cars per hour.
• Can wax 3 cars per hour.

Opportunity Cost for Tom:

• 1 car washed = 3 cars waxed / 3 cars washed = 1 car waxed.
• Therefore, the opportunity cost of washing one car is 1 waxed car.

Comparative Advantage:

• Karl's opportunity cost of washing a car is 0.5 waxed cars and Tom's opportunity cost is 1 waxed car. Since Karl's opportunity cost is lower, Karl has the comparative advantage in washing cars.

Now, considering waxing:

• Karl's opportunity cost of waxing one car = 6 cars washed / 3 cars waxed = 2 cars washed.
• Tom's opportunity cost of waxing one car = 3 cars washed / 3 cars waxed = 1 car washed.

Since Tom's opportunity cost of waxing is lower (1 car washed compared to 2 cars washed for Karl), Tom has the comparative advantage in waxing cars.

Based on this analysis, the correct statements are:

1. The opportunity cost of Tom washing a car is one waxed car.
2. The opportunity cost of Karl washing a car is 0.5 waxed cars.
3. Karl has the comparative advantage in washing cars.
4. Tom has the comparative advantage in waxing cars.

Thus, the correct answer from the options provided is:

Tom has the comparative advantage in waxing cars.