Economics for Engineers (3140911) MCQs

MCQs of Economic Decisions Making & Engineering Costs & Estimation

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1.
The sunk costs may include
(a) A past expenditure that is currently irrelevant
(b) An unrecoverable balance
(c) An invested capital that cannot be retrieved
(d) All of these
Answer:

Option (d)

2.
In context to the objectives of engineering economics pick up the correct statement from the following. (i) It is collection of mathematical techniques that satisfies economic comparison of different alternatives. (ii) It is a decision assistance tool by which one method will be chosen as the most economically one. (iii) It requires understanding of basic terminology and fundamental concepts of economy.
(a) (i) and (ii)
(b) (i) and (iii)
(c) (ii) and (iii)
(d) (i), (ii) and (iii)
Answer:

Option (d)

3.
All of the following are usually included in an engineering economic analysis except
(a) Fixed cost
(b) Variable cost
(c) Sunk cost
(d) Total revenue
Answer:

Option (c)

4.
All of the following are examples of inappropriate practices in engineering economics except which one?
(a) Using faulty or inaccurate data
(b) Failing to bring attention to a potential safety problem in the project due to fear of retribution
(c) When weighing alternatives, using optimistic estimates for one alternative while using pessimistic estimates for others
(d) Identifying all feasible alternatives for a given project
Answer:

Option (d)

5.
Engineering economics can help answer all of the following questions except
(a) Which project/alternative is more economical ?
(b) How long will it take before I recover the principal investment in the project?
(c) Should company rent or buy a machine?
(d) How can a company maintain a high standard of on-the-job safety for employees?
Answer:

Option (d)

6.
Engineering economics may be useful for answering all of the following except
(a) Determining which projects are worthwhile
(b) Determining which projects have higher priority
(c) Determining how safe is the project
(d) Determining how would be the life cycle of the project
Answer:

Option (c)

7.
Engineering economics may help to workout which of the following situations. (i) Choosing the best design for a high-efficiency gas furnace. (ii) Selecting the most suitable robot for a welding operation on an automotive assembly line. (iii) Determining the optimal staffing plan for a computer help desk.
(a) (i) and (ii)
(b) (i) and (iii)
(c) (ii) and (iii)
(d) (i), (ii) and (iii)
Answer:

Option (d)

8.
Which of the following economic analysis procedure is part of engineering decision process ?
(a) Development of the feasible alternatives.
(b) Analysis and comparison of the alternatives.
(c) Performance monitoring and post evaluation of results.
(d) All of the above
Answer:

Option (d)

9.
The additional cost incurred for the production of one more unit of a product or service is called _____________ .
(a) Fixed cost
(b) Variable cost
(c) Marginal cost
(d) Average cost
Answer:

Option (c)

10.
Which of the following is not true for the variable cost?
(a) Variable cost is zero when output quantity is zero.
(b) Initially with increase in production variable cost per quantity reduces but beyond some point it increases sharply.
(c) Costs like insurance, license fees, etc are example of variable cost.
(d) Economic of scale greatly effects variable cost
Answer:

Option (c)

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