Introduction to Engineering Economics

What is the primary focus of economics?

• Maximizing profits

• Studying how people use limited resources

• Evaluating engineering designs

• Minimizing costs

What does engineering economics apply to?

• Natural sciences

• Mathematical theories

• Engineering problems

• Social sciences

Which of the following is NOT a reason why engineering economy is important to engineers?

• Designing involves economic decisions

• Engineers must select from multiple alternatives

• It helps in maximizing company profits

• It eliminates the need for technical analysis

What is the time frame primarily considered in engineering economy?

• Past

• Present

• Future

• Indeterminate

Any work done and has economic value to receivers.

• A good

• A service

• Land

• Product

What does ROR stand for in engineering economics?

• Return on Revenue

• Rate of Return

• Return on Resources

• Rate of Risk

What is the primary basis for selecting the best economic alternative?

• Measure of worth

• Time value of money

• Cost of production

• Market demand

What does economic equivalence help determine?

• The interest rates for loans

• The best location for a project

• The different amounts of money at different points in time that are equal in value

• The total cost of a project

What is one of the non-economic factors that may influence decision-making?

• Cash flow analysis

• Time value of money

• Market pressures

• Cost of materials

What does scarcity mean?

Example: Overfishing can result in a scarcity of a type of fish.

• 
  too many resources

• 
  not enough resources

• an unknown amount of resources