Karen can make 15 wristbands and only three pot holders in one hour. Anna can make 12 wristbands but 2 potholders in one hour. What is the opportunity cost of a pot holder? Who has a comparative advantage in the production of pot holders?

To determine the opportunity cost of a pot holder, we need to compare the production efficiency of pot holders between Karen and Anna. The opportunity cost is the value of the next best alternative that must be given up in order to produce that item.

We can first calculate the opportunity cost for each person by using the concept of a production possibility frontier (PPF). The PPF represents the maximum combination of products that can be produced given the available resources and technology.

For Karen:
In one hour, Karen can make 15 wristbands or 3 pot holders.
To calculate the opportunity cost of a pot holder, we divide the number of wristbands Karen can make by the number of pot holders Karen can make:
Opportunity cost of a pot holder for Karen = 15 wristbands / 3 pot holders = 5 wristbands.

For Anna:
In one hour, Anna can make 12 wristbands or 2 pot holders.
To calculate the opportunity cost of a pot holder, we divide the number of wristbands Anna can make by the number of pot holders Anna can make:
Opportunity cost of a pot holder for Anna = 12 wristbands / 2 pot holders = 6 wristbands.

From the calculations, we can see that Karen's opportunity cost of making a pot holder is 5 wristbands, while Anna's opportunity cost is 6 wristbands.

Comparing the opportunity costs, we can determine who has a comparative advantage in the production of pot holders. The person with a lower opportunity cost has a comparative advantage. In this case, Karen has a comparative advantage as her opportunity cost of making a pot holder is lower than Anna's. Therefore, Karen has a comparative advantage in the production of pot holders.