ENGINEERING ECONOMY Lecture Notes - Lecture 5: Cash Flow, Sunk Costs, Fixed Cost

• School: Adamson University
• Department: Engineering
• Course: ENGINEERING ECONOMY

Document Summary

Engineering economy: economics is the study of how limited resources is used to satisfy unlimited human wants, the study of how individuals and societies choose to use resources that nature and previous generations have provided. It is a collection of mathematical techniques that simplify economic comparisons. It is a discipline concerned with the systematic evaluation of the costs and benefits of the proposed business projects and ventures. Its objective is to choose which among the alternative course of action will give the maximum benefit at the least cost. Law of demand: an economic law stating that as the price of a good or service increases, the quantity demanded decreases, and vice versa. The law that states that as price goes up, the quantity demanded goes down (and vice versa); inverse relationship. Law of supply: an economic law stating that as the price of a good or service increases, the quantity supplied increases, and vice versa.