Question

Chapter 2 Homework Seved Each day, Ted can wax S5 cars or wash 10 cars, and Tom can wax 9 cars or wash 12 cars. What is each man's opportunity cost of washing a car? 10 Instructions: Enter your responses rounded to two decimal places. points Ted's opportunity cost of washing one car i wax jobs. Tom's opportunity cost of washing one car is wax jobs. eBook Who has a comparative advantage in washing cars? Print Ted Tom References 00

Answer 1

As per the question Ted can wax 5 cars per day or wash 10 cars per day

Tom can wax 9 cars per day or wash 12 cars per day

The given information in the question can be summarized in the below table

	Wax	Wash
Ted	5 cars/day	10 cars/day
Tom	9 cars/day	12 cars/day

Now before Ted and Tom, have two job either they wax the car or they wash the car. If they opt to wax the car, they have to sacrifice or foregone the washing of car and vice-versa

The opportunity cost is the cost of next best alternative which is foregone due to present use of activity

	Opportunity cost of Waxing one car	Opportunity cost of Washing one car
Ted	10/5 = 2 wash job	5/10 = 0.5 wax job
Tom	12/9 = 1.33 wash job	9/12 = 0.75 wax job

1. Ted’s opportunity cost of washing one car is 0.5 wax jobs
2. Tom’s opportunity cost of washing one car is 0.75 wax jobs
3. Ted has comparative advantage in washing car

Explanation: Though the opportunity cost washing one car by ted is 0.5 of waxing job and the opportunity cost of washing one care by Tom is 0.75 of waxing job. Moreover it is clearly evident from the above table that the Ted’s opportunity cost of washing one car (0.5) is lower than the Tom’s opportunity cost of washing one car (0.75). Therefore ted has comparative advantage in washing car.

Answer 2

4.2 Given Ted can wax 4 cars per day or wash 2 cars per day and Tom can wax 3 cars per day