Name: Section: 1. In The Wealth of Nations, Adam Smith said that one reason specialization makes someone more productive is because "a man commonly saunters a little in turning his hand from one sort of employment to another." How can you use this observation to improve your pattern of studying for your four or five college courses this semester? 2. Opportunity cost is one of the tougher ideas in economics. Let's make it easier by starting with some simple examples. In the following examples, find the opportunity costs. Your answer should be a rate, as in "1.5 widgets/year" etc. Ignoring Adam Smith's insight from the previous question, assume that these relationships are simple linear ones, so that if you put in twice the time, you get twice the output, and half the time yields half the output. a. Erin has a choice between two activities: She can repair one transmission per hour, or she can repair two fuel injectors per hour. What is the opportunity cost of repairing one transmission? b. Ruby works at a customer service center and every hour she has a choice between two activities: answering 200 phone calls or responding to 400 emails. What is the opportunity cost of responding to 400 emails? c. Deirdre has a choice between writing one more book this year or 5 more articles this year. What is the opportunity cost of writing half a book this year, in terms of articles? 3. Go to www.ted.com and search for Thomas Thwaites's talk, "How | Built a Toaster-from Scratch." How much money and time do you think Thwaites spend building his toaster? How long do you think it would have taken Thwaites to earn enough money in, say, a minimum wage job to buy a toaster? Comment on the division of labor and the importance of specialization in increasing productivity The following come from the MBN Chapter 1 Discussion Questions: a. Why don't individuals simply force the FDA to do what is best for consumers of prescription drugs? b. How could the incentives provided to the FDA be changed to reduce the incidence of Type II errors? (Hint: is it possible to compare the FDA approval process with the drug-approval process in other nations?) c. Suppose for simplicity that both Type I and Type II errors resulted in deaths only. Keeping in mind that too little caution produces Type I errors and too much caution produces Type II errors, what would be the best mix of Type I and II errors