Engineering Economy Flashcards
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.
Engineering Economy
Economic or market situation in which only a single seller or producer supplies a commodity or a service.
Monopoly
Market situation in which there are so few suppliers of a particular product that one supplier’s actions significantly impact prices and supply.
Oligopoly
Market condition in which a product is traded freely by buyers and sellers in large numbers without any individual transaction affecting the price.
Perfect competition
Economic or market situation in which a single consumer or buyer buys a commodity or a service from supplier.
Monopsony
Economic or market situation in which there are many sellers or producers that supplies a commodity or a service to very few consumers.
Oligopsony
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.
Capitalism
Tangible things that satisfy human wants
Goods
Activities that people do for themselves or for other people to satisfy their wants
Services
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.
Necessities
Products or services that are desired by humans and will be purchased if money is available after the required necessities have been obtained.
Luxuries
Quantity of a certain commodity that is bought at a certain price at a given place and time.
Quantity demanded
Quantity of a certain commodity that is offered for sale at a certain price at a given place and time
Quantity supplied (supply)
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.
Law of supply and demand
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.
Law of diminishing returns
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.
Simple interest
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).
Ordinary simple interest
Actual or exact rate of interest earned on the principal during one-year period.
Effective rate of interest
Basic annual rate of interest
Nominal rate of interest
Series of equal payments occurring at equal interval of time.
Annuity
Type of annuity where payments are made at the end of each period beginning from the 1st period.
Ordinary annuity
Type of annuity where the payments are made at the beginning of each period starting from the 1st period.
Annuity due
Type of annuity where the first payment is made later than the first or is made several periods after the beginning of the annuity.
Deferred annuity
A series of disbursements or receipts that increases or decreases in each succeeding period by constant amount.
Uniform arithmetic series
