Engineering Economics - Elements (Exercise 2)

“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”. This statement is known as the:

• Law of diminishing return

• Law of supply

• Law of demand

• Law of supply and demand

What refers to the need. want or desire for a product backed by the money to purchase it?

• Supply

• Demand

• Product

• Good

What refers to the amount of a product made available for sale?

• Supply

• Demand

• Product

• Good

“Under conditions of perfect competition. the price at which any given product will be supplied and purchased is the price that will result in the supply and the demand being equal” This statement is known as the:

• Law of diminishing return

• Law of supply

• Law of demand

• Law of supply and demand

What do you call any particular raw material or primary product such as cloth, wool. flour. coffee, etc?

• Utility

• Necessity

• Commodity

• Stock

What is defined as the interest on a load or principal that is based only on the original amount of the loan or principal?

• Effective rate of interest

• Nominal rate of interest

• Compound interest

• Simple interest

Under ordinary simple interest, how many days in one year?

• 300

• 360

• 365

• 366

One banker's year is equivalentto ______ days.

• 300

• 360

• 365

• 366

What refers to the cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds capital should or will earn?

• Present worth factor

• Interest rate

• Time value of money

• Yield

The difference between the present and future worth of money at some time in the future is called

• Discount

• Deduction

• Inflation

• Depletion