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economics > LE1 > Flashcards

LE1 Flashcards

1
Q

It is a science which deal with the attainment of the maximum fulfillment of society’s unlimited demands for goods and service.

A

Economics

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2
Q

________ is the discipline concerned with the economic aspects or engineering, and involves the systematic evaluation of the costs and benefits of proposed technical business projects and ventures.

A

Engineering Economy

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3
Q

In order to be economically acceptable, solution to engineering problems must demonstrate: (give at least 3)

A
  • Positive balance of long-term benefits over long term cost.
  • Promote well-being and survival of organization.
  • Embody creative and innovative technology and ideas.
  • Permit identification and examination of outcomes.
  • Translates profitability through valid and acceptable measures of merits.
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4
Q

____________ are those products or services that are directly used by people to satisfy their wants.

A

Consumer goods and services

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5
Q

Give at least 3 example of Consumer goods and services

A
  • Home
  • Food
  • Shelter
  • Clothes

etc.

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6
Q

____________ are used to produce consumer goods and services or other producer goods.

A

Producer goods and services

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7
Q

Give examples of Producer goods and services

A
  • Buildings
  • Factories
  • Machines

etc.

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8
Q

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

A

Necessities

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9
Q

Give at least 3 examples of necessities.

A
  • Food
  • Water
  • Air
  • Safety and Security
  • Clothes
  • Shelter
  • Healthcare
  • Education
  • Sleep
  • Energy

etc.

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10
Q

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

A

Luxuries

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11
Q

It can also be defines as those products that have an income-elasticity of demand greater than one.

A

Luxuries

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12
Q

This implies that as income increases, more income will be spent on these products.

A

Luxuries

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13
Q

Give examples of Luxuries.

A
  • Appliances
  • Vacation
  • Entertainment
  • Gadgets

etc.

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14
Q

It refers to the satisfaction or pleasure derives from the consumer goods and services.

A

Utility

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15
Q

This also means the power to satisfy human wants and needs.

A

Utility

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16
Q

The concept of ________ is subjective and varies from person to person, as individuals have different preferences, tastes, and priorities.

A

Utility

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17
Q

_________ is 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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18
Q

It can also be defines as the want or desire or need for product using money to purchase it.

A

Demand

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19
Q

It refers to a situation where a small change in price results in a relatively large change in quantity demanded.

A

Elastic demand

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20
Q

In other words, consumer are very responsive to changes in prices. This typically happens when there are many substitutes available for product or when the product is considered non-essential.

A

Elastic demand

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21
Q

It occurs when a change in price results in a proportionally smaller change in quantity demanded.

A

Inelastic demand

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22
Q

Here, consumers are less sensitive to change in price. This usually happens with essential goods or products with few substitutes.

A

Inelastic demand

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23
Q

_______ occurs when the percentage change in quantity demanded is equal to the percentage change in price.

A

Unitary elasticity of demand

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24
Q

________ is a form of market structure where the number of suppliers are used to determine the type of market.

A

Competition

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25
Q

________ is a place where the vendors or the sellers and vendees or the buyers come together.

A

Market

26
Q

What are the market situations?

A
  • Perfect Competition
  • Monopoly
  • Monopsony
  • Bilateral Monopoly
  • Duopoly
  • Duopsony
  • Oligopoly
  • Oligopsony
  • Bilateral Oligopoly
27
Q

This occurs when a commodity or service is supplied by numerous vendors, and there are no barriers to prevent other vendors from entering the market.

A

Perfect Competition

28
Q

This is the opposite of perfect competition.

A

Monopoly

29
Q

A large construction company that is the only buyer of specific type of raw material, such as specialized steel beams, from local suppliers.

A

Monopsony

30
Q

A situation where a labor union representing workers negotiates wages and working conditions with a single employer, such as major manufacturing plant in a rural area where employment options are limited.

A

Bilateral Monopoly

31
Q

The competition between Smart Communications and Globe Telecom in the mobile telecommunications market.

A

Duopoly

32
Q

Two major supermarket chains, SM Supermarket and Robinsons Supermarket, dominate the grocery retail sector in a specific region.

A

Duopsony

33
Q

The banking sectionn in the Philippines, where a few major banks such as BDO, Metrobank, and Bank of the Philippine Islands (BPI) control the majority of the market share and influence inserest rates and lending practices.

A

Oligopoly

34
Q

A few large seafood processing companies that dominate the market for purchasing fish from local fishermen in coastal areas.

A

Oligopsony

35
Q

A scenario where a handful of pharmaceutical companies negotiate drug prices and terms with a few large hospital chains in the Philippines.

A

Bilateral Oligopoly

36
Q

It states that, “When free competition exists, the price of the product will be that value where supply is equal to the demand.”

A

Law of Supply and Demand

37
Q

This _________ price is where the forces of supply and demand are balances, leading to market stability.

A

Equilibrium

38
Q

It is the amount money paid for the use of borrowed capital or the income produced by money which has been loaned.

A

Interest

39
Q

Defines as any money or property that you can use to produce more wealth.

A

Capital

40
Q

Give the formula for simple interest

A

F = P ( 1 + in )
I = Pin
F = P + I

where:
F = future worth
P = present worth
i = interest rate
I = Interest
n = number of interest period

41
Q

It refers to the difference between the future worth of negotiable paper and its present worth.

A

Discount

42
Q

It also refers to the deduction from the published prices of services or goods.

A

DiscountI

43
Q

Interest directly proportional to the length of time and the amount of the principal borrowed.

A

Simple interest

44
Q

Computed on the basis of one banker’s year.

A

Ordinary Simple Interest

45
Q

Computed based on exact no. of days

A

Exact Simple Interest

46
Q

Give the formula for discount.

A

discount = F - P

where as:
F = future worth
P = present worth

47
Q

A _________ is simply a graphical representation of cash-flow drawn on a time scale.

A

Cash-Flow Diagram

48
Q

It is defined as the interest is computed every end of each interest period and the interest earned for that period is added to the principal.

A

Compound Interest

49
Q

Give the formula for Compound Interest

A

F = P ( 1 + i )^n

50
Q

It is the cost of borrowing money.

A

Rate of Interest

51
Q

It also refers to the amount earned by a unit principal per unit time.

A

Rate of Interest

52
Q

It specifies rate of interest and a number of interest periods in one year.

A

Nominal Rate of Interest

53
Q

what is annual?
in frequency of interest period

A

m = 1

54
Q

what is semi-annual?
or every 6 months?
in frequency of interest period

A

m = 2

55
Q

what is quarterly?
or every 3 months?
in frequency of interest period

A

m = 4

56
Q

what is bi-monthly?
or every 2 months?
in frequency of interest period

A

m = 6

57
Q

_________ is the actual or exact rate of interest on the principal during one year.

A

Effective Rate of Interest

58
Q

what is the formula for Effective Rate of Interest?

A

ER = ( 1 + r/m)^m – 1

where:
ER = Annual Equivalent Rate
r = nominal rate
m = frequency of interest period

59
Q

what is the formula for Nominal Rate of Interest?

A

F = P ( 1 + r/m ) ^m*n

where:
i = annual effective interest rate
r = nominal rate
m = frequency of interest period per year

without given P:

ER = ( 1 + r/m)^m - 1

60
Q

what is monthly in frequency of interest period?

A

m = 12

economics (2 decks)

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