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ENS191 ENGINEERING ECONOMY > ENS191 QUIZ 1 > Flashcards

ENS191 QUIZ 1 Flashcards

1
Q

The analysis and evaluation of the factors that will affect the economic success of engineering projects to the end that a recommendation is made which will insure the best use of capital.

A

Engineering Economy

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2
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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3
Q

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

A

Supply

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4
Q

Market participants selling goods and services.

A

Producers

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5
Q

Market participants buying goods and services.

A

Consumers

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6
Q

The economic price for which good or service is offered in the marketplace.

A

Market Price

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7
Q

It is significantly affected by the demand, availability of substitutes and the competitive landscape.

A

Market Price

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8
Q

What are the factors that affect demand?

A

P -Price of other goods (substitute or complementary)

O - Outlook (consumer expectation of future income and prices)

I - Income (normal goods versus inferior goods)

N - Number of potential costumers (popularity of market)

T- Taste (fads or fashion)

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9
Q

What are the factors affecting supply?

A

P - Productivity (improvements in machines and production processes of a good or service)

I - Inputs (change in the price of inputs required to produce the good or service)

G - Government Actions (subsidies, taxes and regulations)

T - Technology (improvements in machines and production processes of a good or service)

O - Outputs (price changes in other products produced by the firm)

E - Expectations (outlook of future prices and profits)

S - Size of industry (number of firms in the industry)

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10
Q

When the price of a product is increased, less will be demanded.

A

Law of Demand

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11
Q

Quantity demanded and price are negatively related.

A

Law of Demand

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12
Q

Give the two reasons of law of demand.

A

income effect and substitution effect

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13
Q

More will be supplied as prices increase.

A

Law of Supply

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14
Q

Quantity supplied and price are positively related.

A

Law of Supply

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15
Q

Give the reason for the law of supply.

A

Profitability

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16
Q

The price-quantity pair where the quantity demanded is equal to quantity supplied, represented by the intersection of the demand and supply curves.

A

Equilibrium

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17
Q

The price for which the demand and supply for good or service are equal.

A

Equilibrium Price

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18
Q

The amount of output exchanged at the equilibrium price.

A

Equilibrium Quantity

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19
Q

If demand increases and supply remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

A

higher, higher

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20
Q

If demand decreases and supply remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

A

lower, lower

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21
Q

If supply increases and demand remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

A

lower, higher

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22
Q

If supply decreases and demand remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

A

higher, lower

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23
Q

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

A

The Law of Diminishing Returns

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24
Q

At the start, every unit of input leads to the productive gains.

A

Productive Phase

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25
Q

Upon hitting the point of _____, every additional input will give you a slower gain in output.

A

Diminishing Returns

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26
Q

If you reach this phase, every additional input will give you _____.

A

Negative Returns

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27
Q

Those products of services that are directly used by people to satisfy their wants.

A

Consumer goods and services

28
Q

It is used to produce consumer goods and services or other producer goods.

A

Producer goods and services

29
Q

Give examples for consumer goods and services

A

Iphone13, cars, hair color/rebonding

30
Q

Give examples for producer goods and services

A

metals, semi-conductors, electricity

31
Q

Give 4 types of market structure

A
  1. Monopolistic competition
  2. Oligopoly
  3. Monopoly
  4. Perfect competition
32
Q

It occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent additional vendors entering the market.

A

Perfect competition

33
Q

It is the opposite of perfect competition. It exists when a unique product or service is available from a single vendor and that vendor can prevent the entry of all others into the market.

A

Monopoly

34
Q

It is characterized by a large number of firms, none of which can influence market price by virtue of size alone.

A

Monopolistic Competition

35
Q

New firms can enter and established firms can exit such an industry with ease.

A

Monopolistic Competition

36
Q

Some degree of market power is achieved by firms producing differentiated products.

A

Monopolistic Competition

37
Q

It is a strategy that firms use to achieve market power.

A

Product Differentiation

38
Q

It is accomplished by producing products that have distinct positive identities in consumer’s minds.

A

Product Differentiation

39
Q

A form of industry (market) structure characterized by a few dominant firms.

A

Oligopoly

40
Q

The behavior of any one firm in an _____ depends to a great extent on the behavior of others.

A

Oligopoly

41
Q

It exists when there are so few suppliers of a product or service that action by one will almost inevitably result in similar action by the others.

A

Oligopoly

42
Q

How many number of firms in perfect competition?

A

Many

43
Q

How many number of firms in monopoly?

A

One

44
Q

How many number of firms in monopolistic competition?

A

Many

45
Q

How many number of firms in oligopoly?

A

Few

46
Q

Is perfect competition product differentiated or homogeneous?

A

Homogeneous

47
Q

Is monopoly product differentiated or homogeneous?

A

A single, unique product

48
Q

Is monopolistic competition product differentiated or homogeneous?

A

differentiated

49
Q

Is oligopoly product differentiated or homogeneous?

A

Either

50
Q

In perfect competition, is price a decision variable?

A

No

51
Q

In monopoly, is price a decision variable?

A

Yes

52
Q

In monopolistic competition, is price a decision variable?

A

Yes, but limited

53
Q

In oligopoly, is price a decision variable?

A

Yes

54
Q

In perfect competition, is it easy entry?

A

Yes

55
Q

In monopoly, is it easy entry?

A

No

56
Q

In monopolistic competition, is it easy entry?

A

Yes

57
Q

In oligopoly, is it easy entry?

A

Limited

58
Q

Perfect competition is distinguished by?

A

No price competition

59
Q

Monopoly is distinguished by?

A

Still constrained by market demand

60
Q

Monopolistic competition is distinguished by?

A

Price and quality competition

61
Q

Oligopoly is distinguished by?

A

Strategic behavior

62
Q

Give examples for perfect competition.

A

Wheat farming and textile firm

63
Q

Give examples for monopoly.

A

Public utility and patented drug

64
Q

Give examples for monopolistic competition.

A

Restaurants and clothing stores

65
Q

Give examples for oligopoly.

A

Manufacturing industries (automobiles, computers)

ENS191 ENGINEERING ECONOMY (5 decks)

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