Engineering Economy

Question 1

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

Economic or market situation in which only a single seller or producer supplies a commodity or a service.

Answer 2

Monopoly

Question 3

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

Question 4

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

Economic or market situation in which a single consumer or buyer buys a commodity or a service from supplier.

Answer 5

Monopsony

Question 6

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

Question 7

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

Question 8

Tangible things that satisfy human wants

Answer 8

Goods

Question 9

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

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

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

Answer 12

Quantity demanded

Question 13

Quantity of a certain commodity that is offered for sale at a certain price at a given place and time

Answer 13

Quantity supplied (supply)

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 though each month had 30 days. One year is therefore 360 days (called 1 banker’s year).

Answer 17

Ordinary simple interest

Question 18

Actual or exact rate of interest earned on the principal during one-year period.

Answer 18

Effective rate of interest

Question 19

Basic annual rate of interest

Answer 19

Nominal rate of interest

Question 20

Series of equal payments occurring at equal interval of time.

Answer 20

Annuity

Question 21

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

Answer 21

Ordinary annuity

Question 22

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

Answer 22

Annuity due

Question 23

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 23

Deferred annuity

Question 24

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

Answer 24

Uniform arithmetic series

Question 25

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

Answer 25

Uniform geometric series

Question 26

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 26

Capitalized cost

Question 27

Decrease in the value of physical property due to passage of time.

Answer 27

Depreciation

Question 28

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 28

Bond