Scribd
Upload
19 views2 pages

Module 1. Introduction To Engineering Economics

Engineering economics involves the quantitative analysis of alternatives to solve engineering problems, focusing on the economic viability alongside technical aspects. Key principles include developing alternatives, using a common unit of measure, and considering all relevant criteria for decision-making. The document also outlines fundamental economic concepts such as supply, demand, and various market structures like perfect competition, monopoly, and oligopoly.

Uploaded by

Yosuke Itsuki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
19 views2 pages

Module 1. Introduction To Engineering Economics

Engineering economics involves the quantitative analysis of alternatives to solve engineering problems, focusing on the economic viability alongside technical aspects. Key principles include developing alternatives, using a common unit of measure, and considering all relevant criteria for decision-making. The document also outlines fundamental economic concepts such as supply, demand, and various market structures like perfect competition, monopoly, and oligopoly.

Uploaded by

Yosuke Itsuki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

B313 Engineering Economics

Module 1.0: Introduction to Engineering Economics

INTRODUCTION TO ENGINEERING ECONOMICS LAW OF DEMAND

ENGINEERING ECONOMICS

The science that deals with techniques of quantitative


analysis useful for selecting a preferable alternative
from several technically viable ones.

It involves the systematic evaluation of the economic


merits of proposed solutions to engineering
problems.

IMPORTANCE OF ENGINEERING ECONOMICS LAW OF SUPPLY


Engineers seek solutions to problems and the
economic viability of each potential solution is
normally considered along with technical engineering
aspects.

PRINCIPLES OF ENGINEERING ECONOMICS

• Develop alternatives
• Focus on differences
• Usage of a common unit of measure
• Usage of a consistent viewpoint
• Make uncertainty explicit
• Consider all relevant criteria LAW SUPPLY AND DEMAND
• Make the best decision, considering all
relevant considerations.
• Revisit the decisions made.

FUNDAMENTAL ECONOMIC CONCEPT AND


TERMINOLOGIES

ECONOMIC CONCEPT AND TERMINOLOGIES

Consumer (Goods/Services)
Goods and services that are directly consumed by
people.

Producer (Goods/Services)
CLASSIFICATION OF MARKET STRUCTURES
Goods and services that are used as raw materials to
produce consumer goods and services. ➢ PERFECT COMPETITION
• many sellers and many buyers.
Necessities
• minimal competition.
are goods and services that serves as basic need to
• no restrictions between the seller and the
people.
buyer.
Luxuries
are goods and services that people can live without it.

Supply
number of quantities that are available.

Demand
number of quantities being bought.

Module 1.0: Introduction to Engineering Economics


1
B313 Engineering Economics
Module 1.0: Introduction to Engineering Economics

➢ MONOPOLY ➢ OLIGOPSONY
one seller many buyers. Few buyers, many sellers.

LAW OF DIMINISHING MARGINAL RETURNS

➢ MONOPSONY
one buyer many sellers.
A monopsony is the only buyer in the market,
so it has the ability to put pressure on the
sellers to reduce their prices. As the sellers
cannot go anywhere else to sell their goods,
the buyer has the ability to go elsewhere if it
doesn’t get the price it wants.

➢ OLIGOPOLY
Few sellers, many buyers.

Module 1.0: Introduction to Engineering Economics


2

You might also like