Engineering Economics 3

Objective Questions and Answers of Civil Engineering: Engineering Economics 3

Subject: Engineering Economics 3

Part 3: Objective questions and answers of Engineering Economics


Q1. A P 1, 000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 204. It is bought on June 21, 2001 to yield 4% interest. Find the price of the bond.

a) P 1,122.70

b) P 1,144.81

c) P 1,133.78

d) P 1,155.06


Q2. What is defined as any tangible economic activity that contributes directly or indirectly to the satisfaction of human want?

a) Services

b) Goods

c) Commodities

d) Goods or commodities


Q3. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the tinned wire, it will be P 1.15. A 100- pair cable made up with enameled wire cost P 0.55 per linear foot and those made up of tinned wire cost P 0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the same.

a) 1,000 feet

b) 1,040 feet

c) 1,100 feet

d) 1,120 feet


Q4. What is considered as the standard unit which forms the basis of a country’s domestic money supply?

a) Monetary unit

b) Currency

c) Foreign exchange

d) Cash or check


Q5. ABC Corporation makes it a policy that for any new equipment purchased; the annual depreciation cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method.

a) 7 eyars

b) 8 years

c) 9 years

d) 10 years


Q6. The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $ 50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use Unit or Factor method in computing depletion.

a) $ 5,000,000.00

b) $ 5,010,000.00

c) $ 5,025,000.00

d) $ 5,050,000.00


Q7. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?

a) 1.0 hour per unit

b) 1.2 hours per unit

c) 1.4 hours per unit

d) 1.6 hours per unit


Q8. What is defines as the analysis and evaluation of the monetary consequences by using the theories and principles of economics to engineering applications, designs and projects?

a) Economic Analysis

b) Engineering cost analysis

c) Engineering economy

d) Design cost analysis


Q9. What refers to the goods and services that are required to support human life, needs and activities?

a) Producer products

b) Consumer products

c) Luxury

d) Necessity


Q10. What refers to the exchange mechanism that brings together the sellers and the buyers of a product, factor of production or financial security?

a) Mall

b) Market

c) Store

d) Office


Q11. What is a market situation whereby there is only one buyer of an item for which there is no goods substitute?

a) Monopsony

b) Monopoly

c) Oligopoly

d) Oligopsony


Q12. What market situation exists where there is only one buyer and only one seller? 

a) Monopsony

b) Monopoly

c) Bilateral monopsony

d) Bilateral monopoly


Q13. If there is only one seller and many buyers, the market situation is ________ .

a) Duopsony

b) Oligopoly

c) Oligopsony

d) Monopoly


Q14. Duopsony is a market situation where there is/are:

a) Few sellers and few buyers

b) Few sellers and many buyers

c) Many sellers and few buyers

d) One seller and few buyers


Q15. What is another term for “perfect competition”?

a) Atomistic competition

b) No-limit competition

c) Free-for-all competition

d) Heterogeneous market


Q16. What is the opposite of perfect competition?

a) Monopsony

b) Oligopoly

c) Oligopsony

d) Monopoly


Q17. A ______ is a market situation where economies of scale are so significant that cost are only minimized when the entire output of an industry is supplied by a single producer so that the supply costs are lower under monopoly that under perfect competition.

a) Perfect monopoly

b) Bilateral monopoly

c) Natural monopoly

d) Ordinary monopoly


Q18. What refers to the need, want or desire for a product backed by the money to purchase it?

a) Supply

b) Demand

c) Product

d) Good


Q19. “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:

a) Law of diminishing return

b) Law of supply

c) Law of demand

d) Law of supply and demand


Q20. What is defined as the interest on a load or principal that is based only on the original amount of the loan or principal?

a) Effective rate of interest

b) Nominal rate of interest

c) Compound interest

d) Simple interest


Part 3: Objective questions and answers of Engineering Economics


Q1. Answer b


Q2. Answer a


Q3. Answer a


Q4. Answer c


Q5. Answer c


Q6. Answer a


Q7. Answer a


Q8. Answer a


Q9. Answer d


Q10. Answer b


Q11. Answer b


Q12. Answer d


Q13. Answer d


Q14. Answer c


Q15. Answer a


Q16. Answer d


Q17. Answer c


Q18. Answer b


Q19. Answer d


Q20. Answer d