Engineering Economics

Question 1

it is the analysis and evaluation of the factors that will affect the success of engineering projects to the end that a recommendation be made which will ensure the best use of capital.

Answer 1

Engineering Economy

Question 2

it is an economic or a market situation in which only a single seller or producer supplies a commodity or a service.

Answer 2

Monopoly

-poly = number of selllers
keyphrase: single seller or producer

Question 3

it is a market situation in which there are so few suppliers of a particular product that one supplier’s actions significantly impact prices and supply.

Answer 3

Oligopoly

-poly = number of selllers
keyphrase: few suppliers

Question 4

it is a market condition in which a product is traded freely by buyers and sellers in large numbers without any individual transaction affecting the price.

Answer 4

Perfect Competition

Question 5

it is an economic or market situation in which a single consumer or buyer buys a commodity or a service from suppliers.

Answer 5

Monopsony

-psony = number of buyers
keyphrase: single consumer or buyer

Question 6

It is an economic or market situation in which there are many sellers or producers that supplies a commodity or a service to very few consumers.

Answer 6

Oligopsony

-psony = number of buyers
keyphrase: very few consumers

Question 7

it is an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit.

Answer 7

Capitalism

keyphrase: private ownership, motivation by profit

Question 8

these are tangible things – things that you can touch –that satisfy human wants.

Answer 8

Goods

Question 9

these are activities that people do for themselves or for other people to satisfy their wants.

Answer 9

Services

Question 10

products or services that are required to support human life and activities, which will be purchased in somewhat the same quantity even though the price varies considerably.

Answer 10

Necessities / Needs

Question 11

products or services that are desired by humans and will be purchased if money is available after the required necessities have been obtained.

Answer 11

Luxuries

Question 12

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

Answer 12

Demand

keyphrase: commodity that is bought

Question 13

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

Answer 13

Supply

keyphrase: commodity that is offered for sale

Question 14

under conditions of perfect competition the price at which a given product will be supplied and purchased is the price that will result in the supply and the demand being equal.

Answer 14

Law of Supply and Demand

Question 15

when the use of one of the factors of production is limited, either in increasing cost or by absolute quantity, a point will be reached beyond which an increase in the variable factors will result in a less that proportionate increase in output

Answer 15

Law of Diminishing Returns

Question 16

interest on an investment that is calculated once per period, usually annually, on the amount of the capital alone and not on any interest already earned.

Answer 16

Simple Interest

Question 17

a type of simple interest in which interest is calculated as through each month had 30 days.

Answer 17

Ordinary Simple Interest

keyphrase: each month had 30 days.

Question 18

it is a type of simple interest in which interest is calculated on the basis of a year with 365 days rather than the conventional 360 days.

Answer 18

Exact Simple Interest

keyphrase: basis of a year with 365 days

Question 19

is the discount of one unit of principal per unit time

Answer 19

Rate of Discount

Question 20

is defined as the basic annual rate of interest.

Answer 20

Nominal Rate of Interest

Question 21

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

Answer 21

Effective Interest Rate

Question 22

is defined as a series of equal payments occurring at equal interval of time.

Answer 22

Annuity

Question 23

is a type of annuity where the payments are made at the end of each period beginning from the 1st period.

Answer 23

Ordinary Annuity

keyphrase: end of each period

Question 24

is a type of annuity where the payments are made at the beginning of each period starting from the 1st period.

Answer 24

Annuity Due

keyphrase: beginning of each period

Question 25

is the type of annuity where the first payment is made later than the first or is made several periods after the beginning of the annuity

Answer 25

Deferred Annuity ## Footnote keyphrase: first payment is made later than the first

Question 26

is a series of disbursements or receipts that increases or decreases in each succeeding period by constant amount.

Answer 26

Uniform Arithmetic Gradient ## Footnote keyphrase: increases or decreases, constant amount

Question 27

is a series consisting of end-of-period payments, where each payment increases or decreases by a fixed percentage

Answer 27

Uniform Geometric Gradient ## Footnote keyphrase: increases or decreases, fixed percentage

Question 28

refers to the present worth of a property that is assumed to last forever. It is the sum of the first cost and the present costs of perpetual replacement, operation and maintenance.

Answer 28

Capitalized Cost

Question 29

is the decrease in the value of physical property due to passage of time.

Answer 29

Depreciation

Question 30

is a certificate of indebtedness of a corporation usually for a period not less than ten years and guaranteed by a mortgage on certain assets of the corporation or its subsidiaries

Answer 30

Bonds ## Footnote coporation indebtness BONDS

Question 31

written records that convey the business activities and the financial performance of a business, person, or entity

Answer 31

Financial Statements

Question 32

the activity of setting up a business, taking on financial risks in the hope of profit

Answer 32

Entrepreneuship

Question 33

the manifestation of the time value of money, and it primarily represents "rent" paid for the use of money

Answer 33

Interest

Question 34

the number of days in a year for an Ordinary Interest

Answer 34

360 days

Question 35

the number of days in a year for Exact Interest in a normal year

Answer 35

365 days

Question 36

the number of days in a year for Exact Interest in a leap year

Answer 36

366 days

Question 37

How do you identify a leap year?

Answer 37

a year is a leap year if it is divisible by 4 except for century marks not divisible by 400 (1900, 2100, etc.)

Question 38

Which of the following is not an ordinary year? 2006 2014 2024 2200

Answer 38

2024

Question 39

investment securities where an investor lends money to a person a company or a government for a set of period of time, in exchange for regular interest payments

Answer 39

Bonds ## Footnote investment securities invester lends BONDS

Question 40

record all of the money flowing into an account, while credits record all of the money flowing of an account

Answer 40

Debits and Credits

Question 41

refers to a financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point of time

Answer 41

Balance Sheet

Question 42

refers to a general increase in the prices of goods and services in an economy over a period of time

Answer 42

inflation

Question 43

Inflation is measured by

Answer 43

CPI / Consumer Price Index

Question 44

a type of business that is established by just one person

Answer 44

Sole Proprietorship

Question 45

a special corporation with a single stockholder

Answer 45

One-Person Corporation / OPC ## Footnote OPC single stockholder

Question 46

a type of business that requires two or more people who agree to contribute assets, with the intent of dividing profits among all parties involved

Answer 46

Partnership

Question 47

a type of business comprised of many invididuals (maximum of 15) who act as single entity to advance the interest of the corporation as a whole

Answer 47

Corporation

Question 48

an association of persons with a common bond of interest

Answer 48

Cooperative

Question 49

a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost

Answer 49

Return on Investment / ROI

Question 50

the relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy

Answer 50

Supply and Demand

Question 51

Law of Supply states that

Answer 51

As price increases, quantity supplied increases. As price decreases, quantity supplied decreases.

Question 52

Law of Demand states that

Answer 52

As price increases, quantity demanded decreases. As price decreases, quantity demanded increases.

Question 53

A series of payments paid at regular intervals, where payments are uniform, i.e., equal or constant amount

Answer 53

Annuity

Question 54

The fundamental equation used in Break-Even Analysis

Answer 54

Total Income = Total expenses

Question 55

an indicator showing the relationship between the relative costs and benefits of a proposed prohect, expressed in monetary or qualitative terms

Answer 55

Benefit-to-Cost Ratio / BCR