Chapter 1

Question 1

One of the social sciences which consists of that body knowledge dealing with people and their assets or resources

Answer 1

Economics

Question 2

Defined as the sum total of knowledge which treats of the creation and utilization of goods and services for the satisfaction of human wants

Answer 2

Economics

Question 3

Defined as that branch of Economics which involves the application of definite laws of Economics, theories of investment and business practices to engineering problems involving cost

Answer 3

Engineering Economy

Question 4

The study of economic problems with the concept of obtaining the maximum benefit at the least cost

Answer 4

Engineering Economy

Question 5

Involves the study of cost features and other financial data and their applications in the field of engineering as bases for decision

Answer 5

Engineering Economy

Question 6

Important application of Engineering Economy

Answer 6

1. Seeking of New Objectives
2. Discovery of Factors
3. Investment of Capital
4. Comparison of Alternatives
5. Bases for Decision

Question 7

Considers all factors affecting the economy of the project which can be reduced to specific monetary values

Answer 7

Economy Analysis

Question 8

The determination of the methods and sources of financing the project, either through equity capital or borrowed capital, or a combination of both

Answer 8

Financial Analysis

Question 9

Determines all aspect of the project which cannot be reduced to monetary values and considers the uncertainty and the risk inherent in the project

Answer 9

Intangible Analysis

Question 10

Are those which can be expressed in terms of monetary values

Answer 10

Tangible Factors

Question 11

Are those which are difficult or impossible to express definitely in terms of monetary values

Answer 11

Intangible Factos

Question 12

It is also called irreducible factors

Answer 12

Intangible Factors

Question 13

Occurs when a certain product is offered for sale by many vendors or suppliers, and there is no restriction against other vendors from entering the market

Answer 13

Perfect competition

Question 14

The opposite of perfect competition

Answer 14

Monopoly

Question 15

Occurs when a unique product or service is available only from a single supplier and entry of all other possible suppliers is prevented

Answer 15

Perfect monopoly

Question 16

Occurs when there are few suppliers and any action taken by anyone of them will definitely affect the course of action of the others

Answer 16

Oligopoly

Question 17

Defined to be the amount of money or its equivalent which is given in exchange for it.

Answer 17

Price

Question 18

It regulates the production and it is also directly proportional to it

Answer 18

Price

Question 19

Defined to be a place where sellers and buyers come together

Answer 19

Market

Question 20

A limited locality where certain goods such as those which are perishable are sold

Answer 20

Local market

Question 21

Certain goods sold all over the country are said to have a _____

Answer 21

National market

Question 22

Goods that are exported to other countries are said to have a _____

Answer 22

World market

Question 23

Are those that are consumed or used directly by people, or are things and services which serve to satisfy human needs

Answer 23

Consumer goods

Question 24

Are those which produce goods and services for human consumption

Answer 24

Producer goods

Question 25

The quantity of a certain commodity that is bought at a certain price at a given place and time

Answer 25

Demand

Question 26

States that the demand for a commodity varies inversely as the price of the commodity, though not proportionately

Answer 26

Law of Demand

Question 27

Occurs when a decrease in selling price will cause a greater than proportionate increase in the volume of sales

Answer 27

Elastic Demand

Question 28

Goods which are considered luxuries are said to have _____

Answer 28

Elastic Demand

Question 29

Occurs when a decrease in selling price will cause a less than proportionate increase in sales

Answer 29

Inelastic Demand

Question 30

Occurs when the mathematical product of price and volume of sales remains constant regardless of any change in prince

Answer 30

Unitary elasticity of demand

Question 31

Defined to be the capacity of a commodity to satisfy human want

Answer 31

Utility

Question 32

An increase in the quantity of any good consumed or acquired by an individual will decrease the amount of satisfaction derived from that good

Answer 32

Law of Diminishing Utility

Question 33

It is the utility of the last unit of the same commodity which is consumed or acquired

Answer 33

Marginal utility

Question 34

The quantity of a certain commodity that is offered for sale at a certain price at a given place and time

Answer 34

Supply

Question 35

The supply of a commodity varies directly as the price of the commodity, though not proportionately

Answer 35

Law of Supply

Question 36

States that when free competition exists, the price of a product will be that value where supply is equal to the demand

Answer 36

Law of Supply and Demand

Question 37

States that when one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will result in a less than proportionate increase in output

Answer 37

Law of Diminishing Returns

Question 38

The amount received from the sale of an additional unit of a product

Answer 38

Marginal revenue

Question 39

The additional cost of producing one more unit

Answer 39

Marginal cost

Question 40

It is a human ideal worth striving for

Answer 40

Perfection