Economics and Engineering Economics Flashcards

Flashcards on Economics and Engineering Economics

Economics

The study of how limited resources are used optimally to satisfy unlimited human wants.

Resources

Factors needed to achieve a goal, such as employees, equipment, or capital.

Land

Natural resources, including land itself, minerals, water, and other natural resources.

Labor

Human effort, both physical and mental, used in the production of goods and services.

Capital

Man-made goods like machinery, tools, buildings, and equipment used to produce other goods.

Money

The financial resources which are used in the production process

Human Capital

Education & training applied to labor in the production process

Entrepreneurship

The ability to organize and combine the other resources (land, labor, and capital) to create new products and processes. It involves taking risks and innovating.

Economics

The science that deals with the production and consumption of goods and services and the distribution and rendering of these for human welfare

Consumer Goods

Goods & services that are directly used by end consumers

Producer Goods

Goods/services used in the production process of consumer goods and services

Necessities

Products or services that are required to support human life and activities that will be purchased in somewhat the same quantity even though the price varies considerably.

Luxuries

Products or services that are desired by humans and will be purchased if money is available after the required necessities have been obtained.

Demand

A quantity of certain commodities that is bought at a certain price at a given place and time.

Law of Demand

There's an inverse relationship between the price of a good or service and the quantity demanded.

Elastic Demand

A change in price will cause a relatively large change in the quantity demanded of a product.

Inelastic Demand

The quantity demanded of a good or service changes very little, or not at all, in response to a change in its price.

Unitary Elastic Demand

A percentage change in price leads to an equal percentage change in quantity demanded.

Supply

The number of required products/services offered by the firms or sellers.

Law of Supply

There’s a direct relationship between the price of a good or service and the quantity supply

Market Competition Level

The degree of rivalry among businesses within a particular market. It's influenced by factors like the number of sellers, the type of product or service, barriers to entry, and the availability of information to consumers.

Perfect Competition

Many sellers offer identical products, with no barriers to entry or exit, and consumers have perfect information.

Monopolistic Competition

Many sellers, but products are differentiated

Oligopoly

A few large firms dominate the market.

Monopoly

One firm controls the market.

Law of Supply and Demand

Under conditions of perfect competition, the price at which a given product will be supplied and purchased is the price that will result in the supply and demand being equal.

Engineering

Application of science to the optimum conversion of the resources of nature to the uses of humankind.

Engineering Economy

Systematic evaluation of the economic merits of proposed solutions to engineering problems

Engineering Economics

A subset of economics concerned with the use and application of economic principles in the analysis of engineering decisions.

7 Principles of Engineering Economy

Develop the Alternatives, Focus on the Differences, Use a Consistent Viewpoint, Use a Common Unit of Measure, Consider All Relevant Criteria, Make Risk & Uncertainty Explicit, Revisit Your Decisions

Engineering Design Process

A series of steps that engineers follow to come up with a solution to a problem