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M1 CPR

This document defines key economic terms related to engineering economics. It defines economics, engineering economy and its founder Eugene Grant, engineering economic analysis and its founder Arthur Wellington, consumer and producer goods/services, necessities and luxuries, demand and supply, elastic and inelastic demand, unitary elasticity, perfect competition, monopoly, oligopoly, the laws of supply and demand and diminishing returns, and valuation. The document provides concise definitions of these important economic concepts.

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76 views3 pages

M1 CPR

This document defines key economic terms related to engineering economics. It defines economics, engineering economy and its founder Eugene Grant, engineering economic analysis and its founder Arthur Wellington, consumer and producer goods/services, necessities and luxuries, demand and supply, elastic and inelastic demand, unitary elasticity, perfect competition, monopoly, oligopoly, the laws of supply and demand and diminishing returns, and valuation. The document provides concise definitions of these important economic concepts.

Uploaded by

Cy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CE40-2/E01

M1-CPR
CLASS PRODUCED REVIEWER

TERMINOLOGIES TO BE DEFINED:

1. Economics

It is the production, distribution, and consumption of products and services within the social science field. It focuses on how
individuals, businesses, governments, and sovereignties decide how to obtain resources.

2. Engineering Economy (and who is the father?)

Engineering economics entails systematically analyzing the financial advantages of suggested technical solutions. The goal of
engineering economics is to support decision-making through technical analysis that places a focus on economic factors.

The father of engineering economy is Eugene L. Grant. He was an American civil engineer and educator.

3. Engineering Economic Analysis (and who is the founder?)

Engineering economic analysis combines quantitative and qualitative techniques to analyze economic differences among
engineering alternatives in selecting the preferred design. It was founded by Arthur Mellen Wellington, who wrote the book "T he
Economic Theory of Railway Location," published in 1887.

4. Consumer Goods / Services

Consumer goods and services mean any goods or services, including contracts, projects, Credit, or debt primarily used or
applied for personal or residential household or property improvements or personal or family purposes. It is also the means for
goods and services provided to consumers by all entities within the Consumer Goods and Services Industry, including but not
limited to retailers, suppliers, wholesalers, distributors, manufacturers, producers, importers, and their agents.
5. Producer Goods / Services

Producer goods are products that businesses use to create other products or support the delivery of services. Tools or
machinery are a couple of examples of producer goods. Companies selling services primarily to businesses rather than people
and homes are known as producer service providers. Examples of well-known production services companies include
accounting firms, consultants, and computer design services.

6. Necessities

Necessities are goods or services you must have to live properly or do something (food, water, shelter).

7. Luxuries

Luxuries are not necessary to live, but they are highly valued in a culture or society.

8. Demand

Demand refers to how much of a product or service consumers can purchase at a certain price.

9. Supply

Supply is the amount the producers of the product or service are both willing and able to provide with the resources available to
them,

10. Elastic Demand

Elastic demand occurs when the cost of a commodity or service influences consumer demand. For example, customers will
purchase significantly more if the price is reduced even slightly, and vice versa

11. Inelastic Demand

Inelastic demand means that there is only a slight (or no change) in the quantity demanded of the good or service when another
economic factor changes.

12. Unitary Elasticity

Inelastic demand describes a situation where the demand for a good or service remains constant regardless of how much its
price increases or decreases.

13. Perfect Competition

Perfect Competition refers to a theoretical market structure. Under this market structure, numerous buyers and sellers are in a
perfect market, and prices accurately represent supply and demand. Businesses only make as much money as is necessary to
stay in operation. Other businesses would enter the market and reduce revenues if they made excessive profits.
14. Monopoly

A monopoly is a market structure where one producer or seller has the dominant position in an industry. Monopolies are
prohibited in free-market economies as they limit customer alternatives and impede competition.

15. Oligopoly

An oligopoly is a market structure with a small number of firms where none has any significant influence.

16. Law of Supply and Demand

The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers of that
resource. The general thought of this theory is that as price increases, people are willing to supply more and demand less, and
vice versa when the price falls.

17. Law of Diminishing Returns

The law of diminishing returns is a theory in economics that predicts that after some optimal level of capacity is reached, adding
more factors of production will only lead to smaller improvements in output.

18. Valuation

Valuation is an analytical process used to determine the worth of an asset or a company.

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