Final answer:
Frank has a lower opportunity cost for making pizzas and should specialize in that, while Carl should specialize in making sandwiches, where his opportunity cost is lower. By specializing according to their comparative advantages, they can produce a greater number of foods collectively.
Step-by-step explanation:
When deciding who should make what based on their production abilities, we look for their comparative advantage. In one hour, Frank can make 30 pizzas or 20 sandwiches, while Carl can make 12 pizzas or 18 sandwiches. To find their comparative advantage, calculate the opportunity cost for each individual for producing one type of food in terms of the other. For Frank, the opportunity cost of making one pizza is 2/3 of a sandwich (20 sandwiches / 30 pizzas). For Carl, the opportunity cost of making one pizza is 1.5 sandwiches (18 sandwiches / 12 pizzas). Therefore, Frank has a lower opportunity cost for making pizzas.
Conversely, the opportunity cost for Frank to make one sandwich is 1.5 pizzas (30 pizzas / 20 sandwiches), and for Carl, it is 2/3 of a pizza (12 pizzas / 18 sandwiches). Carl has a lower opportunity cost for making sandwiches. Thus, Frank should specialize in making pizzas and Carl should specialize in making sandwiches. This allows each to produce the goods for which they have the lowest opportunity cost and results in a higher overall production for both foods.
Answer: d. Frank should make pizza, Carl should make sandwiches.