Economics - Unit 1 Economics Fundamentals Exam Questions (83 Terms) With Verified Definitions Updated 2024

entrepreneur {Ans: (n.) a person who starts up and takes on the risk of a business}externalities {Ans: A "spillover" effect of an action that affects a third party other than the buyer or seller--can be negative (cigarette smoke/pollution) or positive (benefiting from someone's security system)}specialization {Ans: Goods and services are produced in better quality, quantity and speed when business focus on producing a few things (mass production and assembly line).}Adam Smith {Ans: Adam Smith is often described as the " father of economics"; the theory about markets was developed by Adam Smith...wrote An Inquiry into the Nature and Causes of the Wealth of Nations}caveat emptor {Ans: "let the buyer beware"}barter {Ans: To exchange goods or services without the use of money}voluntary exchange {Ans: the act of buyers and sellers freely and willingly engaging in non-fraudulent market transactions. Both parties should benefit from the exchange.}Two main types of economics {Ans: Microeconomics focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders--small segments of the economy Macroeconomics, on the other hand, takes a much broader view by analyzing the economic activity of an entire country or