# Engineering Economics 4

Objective Questions and Answers of Civil Engineering: Engineering Economics 4

Subject: Engineering Economics 4

Part 4: Objective questions and answers of Engineering Economics

Q1. A machine costs of P 8,000 and an estimated life of 10 years with a salvage value of P 500. What is its book value after 8 years using straight line method?

a) P 2,000.00

b) P 2,100.00

c) P 2,200.00

d) P 2,300.00

Q2. An asset is purchased for P 9,000.00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the depreciation in the first three years using sum-of-years digit method

a) P 3,279.27

b) P 3,927.27

c) P 3,729.27

d) P 3,792.72

Q3. Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The taxable income after taking all deductions except for depletion is P 18,500,000. What is the allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%.

a) P 9,358.41

b) P 9,228.45

c) P 9,250.00

d) P 9,308.45

Q4. A manufacturer produces certain items at a labor cost of P 115 each, material cost of P 76 each and variable cost of P 2.32 each. If the item has a unit price of P 600, how many units must be manufactured each month for the manufacturer to break even if the monthly overhead is P428,000

a) 1,033

b) 1,037

c) 1,043

d) 1,053

Q5. A leading shoe manufacturer produces a pair of Lebron James signature shoes at a labor cost of P 900.00 a pair and a material cost of P 800.00 a pair. The fixed charges on the business are P 5,000,000 a month and the variable costs are P 400.00 a pair. Royalty to Lebron James is P 1,000 per pair of shoes solIf the shoes sell at P 5,000 a pair, how many pairs must be produced each month for the manufacturer to break-even?

a) 2.590

b) 2,632

c) 2,712

d) 2,890

Q6. What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction of human want?

a) Services

b) Goods

c) Commodities

d) Goods or commodities

Q7. What are the two classifications of goods and services?

a) Local and imported

b) Raw and finished

c) Consumer and producer

Q8. What refers to the goods and services that are desired by human and will be acquired only after all the needs have been satisfied?

a) Producer products

b) Consumer products

c) Luxury

d) Necessity

Q9. What is considered as the basic consuming or demanding unit of a commodity?

a) Seller

b) Manufacturer

c) Producer

Q10. What is defined as an entity which makes product, good or services available to buyer or consumer in exchange of monetary consideration?

a) Seller

b) Manufacturer

c) Producer

Q11. What market situation exists where there are few sellers and few buyers?

a) Oligopoly

b) Oligopsony

c) Bilateral oligopoly

d) Bilateral Oligopsony

Q12. What is the market situation exist when there are many buyers and many sellers?

a) Perfect competition

b) Oligopoly

c) Oligopsony

d) Monopoly

Q13. If there are many sellers and few buyers, the market situation is _________ .

a) Duopsony

b) Oligopoly

c) Oligopsony

d) Monopoly

Q14. Oligopoly exists when 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. Duopoly 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

Q16. What refers to the market situation in which any given product is supplied by a very large number of vendors and there is no restriction against additional vendors from entering the market?

a) Perfect competition

b) Oligopoly

c) Oligopsony

d) Monopoly

Q17. Aside from many sellers and many buyers, which one is a characteristic of perfect competition?

a) Homogeneous product

b) Free market entry and exit

c) Perfect information and absence of all economic friction

d) All of the above

Q18. Perfect monopoly exists only if:

a) the single vendor can prevent the entry of all other vendors in the market

b) the single vendor gets the absolute franchise of the product

c) the single vendor is the only one who has the permit to sell

d) the single vendor is the only one who has the knowledge of the product

Q19. “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:

a) Law of diminishing return

b) Law of supply

c) Law of demand

d) Law of supply and demand

Q20. What refers to the amount of a product made available for sale?

a) Supply

b) Demand

c) Product

d) Good

Part 4: Objective questions and answers of Engineering Economics