Definition and Scope of Engineering Economics: Interactive Learning Quizzes

Question 1

In engineering practice, what is a primary function of engineering economics?

Accepted Answer

Evaluating and comparing alternative designs and operations for engineering systems

Answer

Predicting future economic trends and conditions

Answer

Guiding the creation of new engineering technologies

Answer

Ensuring ethical practices in engineering projects

Question 2

Which concept is not part of the core principles of engineering economics?

Accepted Answer

Newton's Laws of Motion

Answer

Time value of money

Answer

Cost-benefit analysis

Answer

Risk assessment

Question 3

What is the significance of the time value of money in engineering economics?

Accepted Answer

It acknowledges that the value of money changes over time.

Answer

It prioritises immediate costs over future costs.

Answer

It assumes that the value of money remains constant.

Answer

It is not relevant in engineering economics.

Question 4

What is the purpose of risk assessment in engineering economics?

Accepted Answer

Identifying and evaluating potential risks associated with engineering projects.

Answer

Eliminating all uncertainties from engineering projects.

Answer

Predicting the exact outcome of engineering projects.

Answer

Risk assessment is not a component of engineering economics.

Question 5

Distinguish between sunk costs and avoidable costs in engineering economics.

Accepted Answer

Sunk costs are unrecoverable costs incurred in the past, while avoidable costs can be eliminated by modifying the course of action.

Answer

Sunk costs are costs expected in the future, while avoidable costs are costs that have already occurred.

Answer

Sunk costs and avoidable costs are identical concepts.

Answer

Neither sunk costs nor avoidable costs are relevant in engineering economics.

Question 6

Which characteristic is NOT fundamental to engineering economics?

Accepted Answer

It exclusively pursues profit maximization.

Answer

It applies economic principles to engineering choices.

Answer

It recognizes the time value of money.

Answer

It assesses the financial viability of engineering projects.

Question 7

What is the primary objective in engineering economics?

Accepted Answer

Optimizing the economic value of projects.

Answer

Minimizing project costs.

Answer

Maximizing project revenues.

Answer

Assessing project environmental impact.

Question 8

How does an investment differ from an expense?

Accepted Answer

An investment yields future benefits, while an expense does not.

Answer

An investment appreciates in value over time, while an expense depreciates.

Answer

An investment is a long-term expenditure, while an expense is a short-term expenditure.

Answer

There is no distinction between an investment and an expense.

Question 9

What is the purpose of a cash flow diagram in engineering economics?

Accepted Answer

Visually representing a project's cash inflows and outflows over time.

Answer

Calculating a project's net present value.

Answer

Determining a project's payback period.

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Assessing a project's risk.

Question 10

How does engineering economics assist in making informed engineering decisions?

Accepted Answer

By assessing the economic viability of engineering projects.

Answer

By analyzing the environmental consequences of engineering projects.

Answer

By guiding ethical and socially responsible decision-making.

Question 11

Engineering economics is primarily concerned with:

Accepted Answer

Evaluating the economic feasibility of engineering projects

Answer

Designing engineering systems

Answer

Predicting future economic conditions

Question 12

In civil engineering, engineering economics is commonly applied to:

Accepted Answer

Evaluating the economic feasibility of infrastructure projects

Answer

Designing new computer chips

Answer

Predicting future electricity demand

Question 13

The time value of money principle implies that:

Accepted Answer

Money has different value at different points in time

Answer

Money always loses value over time due to inflation

Answer

Money can be invested to earn interest

Question 14

**What is the primary goal of engineering economics**?

Accepted Answer

**Determining the optimal allocation of limited resources to accomplish specified objectives**

Answer

**Performing scientific research**

Answer

**Designing and constructing engineering systems**

Question 15

**Which fundamental concept underpins engineering economics**?

Accepted Answer

**Time value of money**

Answer

**Laws of thermodynamics**

Answer

**Principles of quantum mechanics**

Answer

**Conservation of energy**

Question 16

**Define the payback period.**

Accepted Answer

**The duration required for an investment to generate sufficient cash flow to recoup its initial outlay**

Answer

**The present value of an investment's future cash flows**

Answer

**The return on investment rate**

Question 17

**What are the primary applications of engineering economics**?

Accepted Answer

**Feasibility studies, project planning, and decision-making for investments**

Answer

**Scientific research and development**

Answer

**Product testing and design**

Question 18

**What is a key advantage of incorporating engineering economic analysis into decision-making**?

Accepted Answer

**Provides an objective and logical basis for comparing options**

Answer

**Guarantees project success**

Answer

**Eliminates all uncertainty**

Question 19

**When conducting engineering economic analyses, it is important to**:

Accepted Answer

**Consider the ethical implications throughout the process**

Answer

**Only consider ethical implications for large-scale projects**

Answer

**Ignore ethical concerns**