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EECON > EECON > Flashcards

EECON Flashcards

1
Q

profession in which the mathematical and natural sciences are used with
judgment to create methods for economically using the resources and forces of nature for the benefit
of mankind.

A

Engineering

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2
Q

focuses on how finite resources are used to satisfy unsatisfied human desires. Additionally, it examines how people and society decide to use the limited resources
that nature and earlier generations have supplied.

A

economics

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2
Q

education and training applied to labor in the production
process.

A

Human Capital

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2
Q

3 resources of Economics

A

Land, Labor, Capital

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3
Q

assets and money which are used in the production
process.

A

Financial Capital

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3
Q

the efforts, skills, and knowledge of people which are applied to the
production process.

A

Labor

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3
Q

all gifts of nature, such as water, air, minerals, sunshine, plant, and tree growth,
as well as the land itself which is applied to the production process

A

Land

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3
Q

tools, buildings, machinery - things
which have been produced and are used in further production.Real Capital (Physical Capital)

A

Real Capital

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4
Q

a way to make decisions about money for engineering
systems.

A

Engineering Economy

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5
Q

In the business world, most decisions are based on making money, known as

A

Profit

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6
Q

the ones who make these decisions and a lot of engineers end up becoming
managers in manufacturing settings.

A

Managers

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7
Q

Principles of Engineering Economics

A

Develop the Alternatives
Focus on the Differences
Use a Consistent Viewpoint
Use a Common Unit of Measure
Consider All Relevant Criteria
Make Uncertainty Explicit
Revisit your Decisions

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8
Q

those which can be expressed in terms of monetary values

A

Tangible Factors

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9
Q

those which are difficult or impossible to express definitely in
terms of monetary values.

A

Intangible Factors

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10
Q

occurs a certain product is offered for sale by many vendors or
suppliers, and there is no restriction against other vendors from entering the market

A

Perfect Competition

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11
Q

the opposite of perfect competition. Occurs when a unique product or service
is available only from a single supplier and entry of all other possible suppliers is
prevented

A

Monopoly

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12
Q

occurs when there are few suppliers and any action taken by anyone of them
will definitely affect the course of action of the others.

A

Oligopoly

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13
Q

if prices go up, production will increase. If the price decrease,
production will also decrease or cease.

A

Price and Production

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14
Q

defined to be a place where sellers and buyers come together either. Goods exported to other countries are said to have a world market.

A

Local and National Market

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15
Q

are those that are consumed or used directly by people or are things and services which serve to satisfy human needs. Producer goods are those which produce goods and services for human consumption such as tools and ships.

A

Consumer Goods

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16
Q

are those which produce goods and services for human consumption such as tools and ships.

A

Producer goods

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17
Q

the quantity of a certain commodity that is bought at a certain price at a given
place and time.

A

Demand

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18
Q

states that the demand for a commodity varies inversely as the price
of the commodity, though not proportionately

A

Law of Demand

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19
Q

occurs when a decrease in selling price will cause a greater than proportionate increase in the volume of sales. Goods which are considered luxuries are said to have elastic demand, because as small decrease in cost will usually result in a big
increase in sales.

A

Elastic Demand

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20
Q

defined to be capacity of a commodity to satisfy human want. If the utility of a certain good to a certain individual is great, his demand for that good will be great.

A

Utility

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21
Q

An increase in the quantity of any good consumed or acquired by an individual will increase the amount of satisfaction derived from that good.

A

Law of Diminishing Utility

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22
Q

the utility of the last unit of the same commodity which is consumed
or acquired. The last unit of similar commodities or acquired is called the marginal unit.

A

Marginal Utility

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23
Q

the quantity of a certain commodity is offered for sale at a certain price at a
given place and time.

A

Supply

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24
Q

states that the supply of a commodity varies directly as the price of the
commodity, though not proportionately.

A

Law of Supply

25
Q

the law may be stated, “When free competition exists, the
price of a product will be that value where supply is equal to the demand.

A

Law of Supply and Demand

26
Q

states that “When one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will resultin a less than proportionate increase in output.

A

Law of Diminishing Returns

27
Q

a choice made from available alternatives

A

Decision

28
Q

process of identifying problems and opportunities and resolving them.
The term engineering economic decision refers to all investment decisions
relating to engineering projects.

A

Decision Making

29
Q

five main types of engineering economic
decisions

A

a. service improvement,
b. equipment and process selection,
c. equipment replacement,
d. new product and product expansion, and
e. cost reduction

30
Q

decisions that are to carry out the day-to-day activities.

A

Routine decision

31
Q

taken by a group of persons

A

Group decisions

32
Q

the decision is taken by one person.

A

Individual decision

33
Q

is made at top levels. These decisions are taken to determine the basic
policies and goals of the organization.

A

Policy decision

34
Q

are taken to executive the policy decisions. These decisions are taken at middle and lower management levels and are related to the routine activities of a business.

A

Operating decisions

35
Q

are made by the executive in his/her capacity as a manager in order to achieve the best interest of the organization. This decision can be delegated to other members of the organization.

A

Organizational decisions

36
Q

the decision with regard to the quality of the product, price of the product and development a new product

A

Major decision

37
Q

by the manager’s personal capacity. This decision is not delegated. Executive personal work

A

Personal decision

38
Q

ongoing processes of evaluating situations or problems, considering ‐alternatives, making choices, and following them up with the necessary actions.

A

Decision-making and problem-solving

39
Q

recognizing problem-formulating the problem clearly and completely

A

Identifying the problem

40
Q

collection and classification of objectives or goals

A

Analyzing the problem

41
Q

refers to all investment decisions relating to engineering projects. The most interesting facet of an economic decision, from an engineer’s point of view, is the evaluation of costs and benefits associated with making a capital investment.

A

Engineering Economic Decision

42
Q

play an essential role in your business during the processes of product
development and maintenance. Their skills help create products that pass quality assurance tests
for customers.

A

Engineer

43
Q

the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

A

Time Value of Money

44
Q

the amount of money paid for the use of
borrowed capital.

A

interest

45
Q

defined as the interest on a loan or principal that is based only on the original amount of the loan or principal

A

Simple Interest (denoted as I)

46
Q

length of time the amount or principal is borrowed

A

Directly Proportional

47
Q

amount of money borrowed and on which interest is charged

A

The principal

48
Q

amount earned by one unit of principal during a unit of time.

A

The rate of Interest

49
Q

𝑰 = 𝑷𝒊𝒏

A

Simple INterest

50
Q

based on the one banker’s year. A banker year is composed
of 12 months of 30 days each which is equivalent to a total of 360 days in a year.

A

Ordinary simple interest

51
Q

based on the exact number of days in a given year. An
ordinary or normal year has 365 days

A

exact simple interest

52
Q

𝑭 = 𝑷(𝟏 + 𝒊)𝒏

A

Compound Interest

53
Q

the interest earned by the principal is not paid at the end of each
interest period, but is considered as added to the principal and therefore will also earn interest for
the succeeding periods.

A

Compound Interest

54
Q

what happens when the interest earned on an investment is
calculated and reinvested back into the account for an infinite number of periods.

A

Continuously compounded return

55
Q

means that the return on investment is calculated every year, and it is
different from simple interest.

A

Annual compounding

55
Q

𝑭 = 𝑷𝒆𝒊𝒏

A

Continuous Compounding

55
Q

𝑬𝑹 = 𝒆𝒊 − 𝟏

A

Continuous Compounding

56
Q

defined as the basic annual rate of interest. Not include any
consideration of compounding.

A

Nominal Rate of Interest

57
Q

defined as the actual or the exact rate of interest earned on the
principal during a one-year period

A

Effective Rate of Interest

58
Q

𝑬𝑹 = (𝟏 + 𝑵𝑹/𝒎 )𝒎 − 𝟏

A

Effective Rate of Interest

59
Q

defined as a series of equal payments “A” occurring at equal intervals of time.

A

Annuity (A)

59
Q

When an annuity has a fixed time span

A

Annuity certain

60
Q

payment period is the same as the interest period. If the payments are made monthly then the conversion of money also occurs monthly.

A

Simple annuity

61
Q

payment period is not the same as the interest period however it can be converted to a simple annuity by making the payment period the same as the compounding period by the concept of
effective rates.

A

General annuity

62
Q

𝑭 = 𝑨[(𝟏 + 𝒊)𝒏 − 𝟏]/i

A

Future Amount of Ordinary Annuity

63
Q

𝑷 =𝑭/(𝟏 + 𝒊)𝒏 = 𝑨[(𝟏 + 𝒊)𝒏 − 𝟏]/(𝟏 + 𝒊)𝒏 𝒊

A

Present Amount of Ordinary Annuity

EECON (1 decks)

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