ENGECON 213: Introduction Flashcards
It is the analysis and evaluation of the factors that will affect the economic success of engineering projects.
Engineering Economy
It deals with the concepts and techniques of analysis useful in evaluating the worth of systems, products, and services in relation to their cost.
Engineering Economy
A civil engineer who addressed the role of economic analysis in engineering projects and his particular area of interest was railroad building.
Arthur M. Wellington
He published the first edition of his textbook and his emphasis on developing an economic view in engineering in 1930.
Eugene Grant
They wrote the first edition of engineering economy in 1942.
Woods and De Garmo
It designates the worth that a person attaches to an object or service.
Value
It is the power to satisfy human wants.
Utility
Are those products or services that are directly used by people to satisfy their wants.
Consumer Goods and Services
These also satisfy human wants but indirectly in as much as they are used to produce the consumer goods and services.
Producer Goods and Services
The 8 Kinds of Cost
- First Cost
- Operating Cost
- Maintaining Cost
- Fixed Cost
- Variable Cost
- Increment Cost
- Marginal Cost
- Sunk Cost
The ‘initial cost’ of capitalized property including transportation, installation for service and other related initial expenditure.
First Cost
Also called “investment cost”.
First Cost
These are incurred by the ‘operation’ of physical plant or equipment needed to provide service.
Operating Cost
This occur over time until the structure, system, or equipment item is ‘retired’ from service.
Maintaining Cost
It is a cost that remains constant over a wide range of activity as long as the business does not permanently discontinue operations.
Fixed Cost
It is a cost that varies more or less directly with the volume output.
Variable Cost
The additional cost that will result from ‘increasing the output of a system’ by one or more units.
Increment Cost
The cost of an ‘additional unit’ of a product.
Marginal Cost
It refers to the cost in the ‘past’.
Sunk Cost
There are products or services that are required to support human life and activities.
Necessities
Is defined as any product that has an income-elasticity of demand less than one.
Necessity Product/Staple Product
These are products or services that are ‘desired’ by humans and will be purchased if money is available.
Luxuries
It is defined as any product that has an income-elasticity of demand greater than one.
Luxury Product
The 3 Types of Demand
- Elastic Demand
- Inelastic Demand
- Unitary Elasticity of Demand
It is the quantity of a certain commodity that is bought at a certain prices at a given place and time.
Demand
It occurs when a decrease in selling price result in a ‘greater’ than proportionate increase in sales.
Elastic Demand
It occurs when a decrease in selling price result in a ‘lesser’ than proportionate increase in sales.
Inelastic Demand
It occurs when the mathematical product of volume and price is constant.
Unitary Elasticity of Demand
It refers to the exchange in mechanism that brings together the sellers and buyers of a product.
Market
It is defined as the basic consuming or demanding unit of commodity.
Buyer/Consumer
It is defined as an entity which makes product, good or service available to buyer in exchange of monetary decision.
Seller
