This
post covers the syllabus of Unit 1 Introduction to Economics of the subject
Engineering Economics in Regulation 2013.
MG6863 ENGINEERING ECONOMICS
Unit 1 Introduction to Economics
Introduction to Economics-Flow in
an economy, Law of supply and demand, Concept of Engineering
Economics–Engineering efficiency, Economic efficiency, Scope of engineering
economics-Element of costs, Marginal cost, Marginal Revenue, Sunk cost,
Opportunity cost, Break-even analysis-V ratio, Elementary economic
Analysis – Material
selection for product
Design selection for
a product, Process planning.
Part-A
(2 Marks)
1. Define
the term Cost.
Cost may be defined as a total of all expenses
incurred, whether paid of outstanding in the manufacture and sale of a product.
2. What is
elasticity of Demand?
It may be defined as the degree of responsiveness of
quantity demanded to a change in a price.
3. What is opportunity cost?
Opportunity cost may be defined as the
potential benefit that is given up as you seek an alternative course of action.
In other words, the expected return or benefit for gone in rejecting one course
of action for another.
4. Define marginal costing.
Marginal costing may be defined by ICWA as “the ascertainment by differentiating between
fixed costs, of marginal costs and the effect on profit of changes in volume or
type of output”.
5. Define P/V
ratio.
Profit- Volume ratio expressed as a
percentage indicates the relative profitability of different products.
6. What is meant by
Break-Even point?
It is point where the total sales are
equal to the total cost. Therefore the volume of output at which neither a
profit is made nor a loss is incurred.
7.
Define the term costing.
According to the Institute of costs and
Management Accountants (ICMA) the costing may be defined as the technique and
process of ascertaining costs and studies the principles and rules concerning
the determination of costs of products and services.
8. List out the
Elements of cost
The elements of costs are
(1)
Raw
material cost
(2)
Labor
cost
(3)
Expenses
cost
9.
What is meant by marginal revenue?
The revenue can be obtained from selling
one more unit of product is called as marginal revenue.
10.
What is sunk cost?
It is the cost in which was incurred or
sunk in the past and is not relevant to the particular decision making in a
sunk cost or sunk loss. It may be variable or fixed or both.
11. List out the
types of costs.
(1) Opportunity cost
(2) Sunk cost
(3) Material Cost
(4) Marginal cost
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Part-B (16 Marks)
1.Explain
the concept of break even analysis with neat diagram. (16)
2. Explain
the following in detail with suitable examples.
(i)
Supply (8)
(ii)
Demand (8)
3. Explain
in detail about flow in an economy.(16)
4. Briefly
explain about element of costs and its
classification.(16)
5. Explain
in detail about the process planning and its types. (16)
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