Question

Each day, Ted can wax 10 cars or wash 15 cars, and Tom can wax 6 cars or wash 8 cars. What is each man's opportunity cost of washing a car

Answer 1

Ted's = 10/15

= 2/3 = 0.67

Tom's = 6/8

= 3/4 = 0.75

Explanation:

The opportunity cost of washing a car in each case = No. of cars waxed by each / No. of cars washed by each

Hence, Ted's opportunity cost of washing a car = 10/15

= 2/3 = 0.67

And similarly, Tom's opportunity cost of washing a car = 6/8

= 3/4 = 0.75

Thus, for washing 1 car Ted gives 0.67 portion of waxing of Car and Tom gives 0.75 portion of waxing of Car.