LE1 Flashcards
It is a science which deal with the attainment of the maximum fulfillment of society’s unlimited demands for goods and service.
Economics
________ 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.
Engineering Economy
In order to be economically acceptable, solution to engineering problems must demonstrate: (give at least 3)
- 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.
____________ are those products or services that are directly used by people to satisfy their wants.
Consumer goods and services
Give at least 3 example of Consumer goods and services
- Home
- Food
- Shelter
- Clothes
etc.
____________ are used to produce consumer goods and services or other producer goods.
Producer goods and services
Give examples of Producer goods and services
- Buildings
- Factories
- Machines
etc.
___________ 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.
Necessities
Give at least 3 examples of necessities.
- Food
- Water
- Air
- Safety and Security
- Clothes
- Shelter
- Healthcare
- Education
- Sleep
- Energy
etc.
___________ are those products or services that are desired by humans and will be purchased if money is available after required necessities have been obtained.
Luxuries
It can also be defines as those products that have an income-elasticity of demand greater than one.
Luxuries
This implies that as income increases, more income will be spent on these products.
Luxuries
Give examples of Luxuries.
- Appliances
- Vacation
- Entertainment
- Gadgets
etc.
It refers to the satisfaction or pleasure derives from the consumer goods and services.
Utility
This also means the power to satisfy human wants and needs.
Utility
The concept of ________ is subjective and varies from person to person, as individuals have different preferences, tastes, and priorities.
Utility
_________ is the quantity of a certain commodity that is bought at a certain price at a given place and time.
Demand
It can also be defines as the want or desire or need for product using money to purchase it.
Demand
It refers to a situation where a small change in price results in a relatively large change in quantity demanded.
Elastic demand
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.
Elastic demand
It occurs when a change in price results in a proportionally smaller change in quantity demanded.
Inelastic demand
Here, consumers are less sensitive to change in price. This usually happens with essential goods or products with few substitutes.
Inelastic demand
_______ occurs when the percentage change in quantity demanded is equal to the percentage change in price.
Unitary elasticity of demand
________ is a form of market structure where the number of suppliers are used to determine the type of market.
Competition
________ is a place where the vendors or the sellers and vendees or the buyers come together.
Market
What are the market situations?
- Perfect Competition
- Monopoly
- Monopsony
- Bilateral Monopoly
- Duopoly
- Duopsony
- Oligopoly
- Oligopsony
- Bilateral Oligopoly
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.
Perfect Competition
This is the opposite of perfect competition.
Monopoly
A large construction company that is the only buyer of specific type of raw material, such as specialized steel beams, from local suppliers.
Monopsony
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.
Bilateral Monopoly
The competition between Smart Communications and Globe Telecom in the mobile telecommunications market.
Duopoly
Two major supermarket chains, SM Supermarket and Robinsons Supermarket, dominate the grocery retail sector in a specific region.
Duopsony
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.
Oligopoly
A few large seafood processing companies that dominate the market for purchasing fish from local fishermen in coastal areas.
Oligopsony
A scenario where a handful of pharmaceutical companies negotiate drug prices and terms with a few large hospital chains in the Philippines.
Bilateral Oligopoly
It states that, “When free competition exists, the price of the product will be that value where supply is equal to the demand.”
Law of Supply and Demand
This _________ price is where the forces of supply and demand are balances, leading to market stability.
Equilibrium
It is the amount money paid for the use of borrowed capital or the income produced by money which has been loaned.
Interest
Defines as any money or property that you can use to produce more wealth.
Capital
Give the formula for simple interest
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
It refers to the difference between the future worth of negotiable paper and its present worth.
Discount
It also refers to the deduction from the published prices of services or goods.
DiscountI
Interest directly proportional to the length of time and the amount of the principal borrowed.
Simple interest
Computed on the basis of one banker’s year.
Ordinary Simple Interest
Computed based on exact no. of days
Exact Simple Interest
Give the formula for discount.
discount = F - P
where as:
F = future worth
P = present worth
A _________ is simply a graphical representation of cash-flow drawn on a time scale.
Cash-Flow Diagram
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.
Compound Interest
Give the formula for Compound Interest
F = P ( 1 + i )^n
It is the cost of borrowing money.
Rate of Interest
It also refers to the amount earned by a unit principal per unit time.
Rate of Interest
It specifies rate of interest and a number of interest periods in one year.
Nominal Rate of Interest
what is annual?
in frequency of interest period
m = 1
what is semi-annual?
or every 6 months?
in frequency of interest period
m = 2
what is quarterly?
or every 3 months?
in frequency of interest period
m = 4
what is bi-monthly?
or every 2 months?
in frequency of interest period
m = 6
_________ is the actual or exact rate of interest on the principal during one year.
Effective Rate of Interest
what is the formula for Effective Rate of Interest?
ER = ( 1 + r/m)^m – 1
where:
ER = Annual Equivalent Rate
r = nominal rate
m = frequency of interest period
what is the formula for Nominal Rate of Interest?
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
what is monthly in frequency of interest period?
m = 12
