Chapter 1 Flashcards
1
Q
What characteristics define problems suitable for engineering economic analysis?
A
- The problem is important enough
- It requires organization and forethought
- It has important economic aspects
2
Q
9-step rational decision-making approach
A
- Recognize the problem
- Define the objective
- Assemble relevant data
- Identify feasible alternatives
- Select criteria
- Construct a model
- Predict outcomes
- Choose the best alternative
- Audit results
3
Q
3 types of costs and benefits
A
- Market consequences
- Extra-market consequences (shadow prices)
- Intangible consequences
4
Q
What two alternatives are often overlooked?
A
- “Do nothing” alternatives
- “Temporary solution” alternatives
