Eng Eco Flashcards
If you are investing your money, which is
better?
A. 9% compounded bi-monthly
B. 9% compounded monthly
C. 9% compounded quarterly
D. 9% compounded semi-annually
B. 9% compounded monthly
For a fixed interest rate per period “I” the mode with more compounding periods”m” will yield higher effective rate of
interest “ERI”.
Which of these gives the lowest
effective rate of interest?
A. 11.60% compounded annually
B. 12.35% compounded annually
C. 12.20% compounded annually
D. 11.90% compounded annually
A. 11.60% compounded annually
For the same mode or number of
compounding periods, small nominal
rate yields low effective rate.
(EngEco Figure)
It is defined to be the capacity of a
commodity to satisfy human want
A. Luxuries
B. Discount
C. Utility
D. Necessity
C. Utility
Utility - is the power to satisfy human
wants
Necessities -the goods and services
that are required to support human life,
needs and activities.
Luxuries - those goods and services that are desired by human and will be acquired only after all the necessities have been satisfied.
Discount - is the difference between what is it worth in the future and its present worth.
It is an amount which a willing buyer will
pay to a willing seller for the property
where each has equal advantage and is
under no compulsion to buy or sell.
A. Fair value
B. Book value
C. Market value
D. Use value
C. Market value
Market value is the amount for which
something can be sold on a given
market. Market value is often used
interchangeably with open market value,fair value or fair market value, although these terms have distinct definitions in different standards, and differ in some circumstances.
Book value is the value of an asset
according to its balance sheet account
balance. For assets, the value is based
on the original cost of the asset less any
depreciation, amortization or
impairment costs made against the
asset.
is the loss of value of the
equipment with use over a period of
time. It could mean a difference in value between a new asset and the use asset currently in a service.
A. Extracted
B. Depreciation
C. Loss
D. Gain
B. Depreciation
Depreciation is the decrease in value of physical property due to the passage of time. It can be calculated using a variety of methods.
An economic condition in which there
are so few suppliers of a particular
product that one supplier’s actions
significantly affect prices and supply.
A. Monopoly
B. Monopsony
C. Perfect competition
D. Oligopoly
D. Oligopoly
Oligopoly exists when there are so few
suppliers of a product or service that
the action of one will inevitably result in a similar action by the other suppliers.Perfect Competition (also known as atomistic competition) refers to the market situation in which any given product is supplied by a very large number of vendors and there is no
restriction against additional vendors
from entering the market.
Monopoly is the opposite of perfect competition. There exists a perfect monopoly if the single vendor can
prevent the entry of all other vendors
into the market. The monopolist is in the
position to set the market price.
It is the worth of a property as recorded
in the book of an enterprise.
A. Salvage value
B. Book value
C. Scrap value
D. Price
B. Book value
Book value is the value of an asset
according to its balance sheet account
balance. For assets, the value is based
on the original cost of the asset less any
depreciation, amortization or
impairment costs made against the
asset.
Salvage value or scrap value is the book
value of an asset after all depreciation
has been fully expensed. The salvage value of an asset is based on what a company expects to receive in
exchange for selling or parting out the
asset at the end of its useful life.
Reduction in the level of nation income and output usually accompanied by a fall in the general price level.
A. Deflation
B. Depreciation
C. Devaluation
D. Inflation
A. Deflation
Deflation is the reduction in the level of
national income and output usually
accompanied by a fall in the general
price level. This is the opposite of
inflation
Inflation is the increase in the general
level of prices in an economy that is
sustained over a period of time.
Devaluation is an administered
reduction in the value of a currency
against other currencies under a fixed
exchange rate system.
Depreciation is the decrease in value of physical property due to the passage of time. It can be calculated using a variety of methods.
A formal organization of producers
within industry forming a perfect
collusion purposely formed to increase profit and block new comers from the industry.
A. Corporation
B. Competitors
C. Cartel
D. Monopoly
C. Cartel
A cartel is a collection of independent
businesses or organizations that
collude in order to manipulate the price
of a product or service. Cartels are
competitors in the same industry and
seek to reduce that competition by
controlling the price in agreement with
one another.
A market situation where there is only
one seller with many buyer.
A. Oligopoly
B. Monopoly
C. Perfect competition
D. Monophony
B. Monopoly
(EngEco Table)
A market situation where there is one
seller and buyer.
A. Monopoly
B. Bilateral monopoly
C. Bilateral duopoly
D. Oligopoly
B. Bilateral monopoly
A series of equal payments made at
equal interval of time.
A. Depreciation
B. Annuity
C. Bonds
D. Amortization
B. Annuity
Annuity is a series of uniform payments
made at equal intervals of time.
Annuities are established as payment for a debt by a series of equal payment at equal time intervals or as
amortization. It may also be a substitute periodic payment for a future lump sum payment.
Amortization is the action or process of
reducing or paying off a debt with
regular payments.
Depreciation is the decrease in value of physical property due to the passage of time. It can be calculated using a variety of methods.
Bond is a certificate of indebtedness of
a corporation usually for a period not
less than ten years and guaranteed by a
mortgage on certain assets of the corporation or its subsidiaries
The money paid for the use of borrowed
capital.
A. Interest
B. Annuity
C. Bonds
D. Amortization
A. Interest
Interest - from the borrower’s
viewpoint, it is defined as the amount of
money paid for the use of borrowed
capital. From the lender’s viewpoint, it is
the income generated by the money
which has been lent.
The place where buyers and sellers
come together.
A. Bargain center
B. Store
C. Market
D. Port
C. Market
Market refers to the exchange
mechanisms that bring together the sellers and the buyers of a product. It may also refer to the place or area in which buyers and sellers exchange a well-defined commodity.
A market situation in which two
competing buyers exert controlling
influence over many sellers.
A. Oligopoly
B. Bilateral monopoly
C. Duopsony
D. Duopoly
C. Duopsony
A market situation in which two
powerful groups or organizations
dominate commerce in one business
market or commodity.
A. Duopoly
B. Duopsony
C. Oligopoly
D. Oligopsony
A. Duopoly
The type of annuity where the first
payment is made after several periods
after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
D. Deferred annuity
Deferred Annuity - a type of annuity
wherein the first payment is made later than the first or is made several periods after the beginning of annuity.
Ordinary Annuity - a type of annuity
wherein the payments are made at the
end of each period starting from the
first period.
Annuity Due - a type of annuity wherein the payment is made at the beginning of each period.
Perpetuity - a type of annuity in which the periodic payments extend forever or continue indefinitely.
The condition in which the total income
equals the total operating expenses.
A. Check and balance
B. Tally
C. Par value
D. Break even
D. Break even
Break-even analysis is the method of
determining when costs exactly equal revenue. The point where the total income equals the total expenses is
(EngEco Figure)
The amount which has been spent or
capital invested which for some
reasons cannot be retrieved.
A. Depletion cost
B. Construction cost
C. Sunk cost
D. Fixed costs
C. Sunk cost
A sunk cost refers to money that has
already been spent and which cannot be
recovered.
Fixed costs are business costs, such as
rent, that are constant whatever the
quantity of goods or services produced.
Construction cost is the total costs,
direct and indirect, associated with
transforming a design plan for material and equipment into a project ready for operation.
The amount received from the sale of
an addition unit of a product.
A. Marginal revenue
B. Prime cost
C. Marginal cost
D. Extra profit
A. Marginal revenue
Marginal revenue is the revenue gained
by producing one additional unit of a
good or service.
Marginal cost is the cost added by producing one additional unit of a product or service.
Prime costs are a firm’s expenses
directly related to the materials and
labor used in production. It refers to a
manufactured product’s costs, which
are calculated to ensure the best profit
margin for a company.
Extra profit is called supernormal profit or abnormal profit which refers to profit above that level of normal profit.
The worth of the property which is equal
to the original cost less the amount
which has been charged to
depreciation.
A. Market value
B. Salvage value
C. Book value
D. Scrap value
C. Book value
The difference between the present
value and the worth of money at some
time in the future is called
A. Interest
B. Market value
C. Net value
D. Discount
D. Discount
Discount - is the difference between what is it worth in the future and its present worth.
Interest - from the borrower’s
viewpoint, it is defined as the amount of
money paid for the use of borrowed
capital. From the lender’s viewpoint, it is
the income generated by the money
which has been lent.
Market value - the amount for which
something can be sold on a given
market. Market value is often used
interchangeably with open market value fair value or fair market value, although these terms have distinct definitions indifferent standards, and differ in some circumstances
The addition cost of producing one
more unit is
A. Marginal cost
B. Prime cost
C. Differential cost
D. Sunk cost
A. Marginal cost
Marginal cost is the cost added by producing one additional unit of a product or service.
Prime costs are a firm’s expenses
directly related to the materials and
labor used in production. It refers to a
manufactured product’s costs, which
are calculated to ensure the best profit
margin for a company.
A sunk cost refers to money that has
already been spent and which cannot be
recovered.
Differential cost refers to the difference
between the cost of two alternative
decisions. The cost occurs when a
business faces several similar options,and a choice must be made by picking one option and dropping the other.
