ENGINEERING ECONOMY ACTUAL TEST
QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE
●● Economically
Answer: materials and forces of nature for the benefit of mankind.
●● Engineering Economy
Answer: discipline concerned with the economic aspect of engineering.
●● Engineering Economy
Answer: systematic evaluation with the economic merits of proposed
solution
●● Engineering Economics
Answer: application of economic techniques to the evaluation of design
and engineering alternatives.
Asses the appropriateness of a given project, estimate its value, and
justify it from an engineering standpoint.
●● Consumer goods and services
,Answer: used by people to satisfy their wants. (foods, clothing, homes,
cars, services)
●● Producer goods and services
Answer: used to produce consumer goods and services and other
producer goods. (machine tools, factory, buses, machinery)
●● Price of goods and services
Answer: present amount of money or its equivalent
●● Demand
Answer: quantity of certain commodity that is bought at a certain price
at a given place and time.
●● Supply
Answer: quantity of certain commodity that is offered for sale at a
certain price at a given place and time
●● Perfect competition
Answer: any given product is supplied by a large number of vendors and
there is no restrictions in additional suppliers entering the market.
●● Perfect monopoly
, Answer: unique product or service is available from a single supplier
and that no vendor can prevent the entry of all others into the market.
●● Oligopoly
Answer: few suppliers and any action taken by anyone of them will
definitely after the course of action of the others.
●● Total revenue
Answer: selling price per unit x number of units sold
●● Total cost
Answer: fixed cost + variable cost
●● Profit/Loss
Answer: total revenue - total cost
●● Fixed costs
Answer: unaffected by changes. (admin salaries, license fees, interest
cost, insurance, tax)
●● Variable cost
Answer: associated with an operation that vary in total with the quantity
of output. (materials, labor)
QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE
●● Economically
Answer: materials and forces of nature for the benefit of mankind.
●● Engineering Economy
Answer: discipline concerned with the economic aspect of engineering.
●● Engineering Economy
Answer: systematic evaluation with the economic merits of proposed
solution
●● Engineering Economics
Answer: application of economic techniques to the evaluation of design
and engineering alternatives.
Asses the appropriateness of a given project, estimate its value, and
justify it from an engineering standpoint.
●● Consumer goods and services
,Answer: used by people to satisfy their wants. (foods, clothing, homes,
cars, services)
●● Producer goods and services
Answer: used to produce consumer goods and services and other
producer goods. (machine tools, factory, buses, machinery)
●● Price of goods and services
Answer: present amount of money or its equivalent
●● Demand
Answer: quantity of certain commodity that is bought at a certain price
at a given place and time.
●● Supply
Answer: quantity of certain commodity that is offered for sale at a
certain price at a given place and time
●● Perfect competition
Answer: any given product is supplied by a large number of vendors and
there is no restrictions in additional suppliers entering the market.
●● Perfect monopoly
, Answer: unique product or service is available from a single supplier
and that no vendor can prevent the entry of all others into the market.
●● Oligopoly
Answer: few suppliers and any action taken by anyone of them will
definitely after the course of action of the others.
●● Total revenue
Answer: selling price per unit x number of units sold
●● Total cost
Answer: fixed cost + variable cost
●● Profit/Loss
Answer: total revenue - total cost
●● Fixed costs
Answer: unaffected by changes. (admin salaries, license fees, interest
cost, insurance, tax)
●● Variable cost
Answer: associated with an operation that vary in total with the quantity
of output. (materials, labor)
