lecture1.pdf - MECH 2019(3 PROJECT APPRAISAL TECHNIQUES...

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MECH 2019(3) - PROJECT APPRAISAL TECHNIQUES Introduction to different branches of Economics. Microeconomics: Supply and Demand Analysis, Monopoly & Competition Macroeconomics: National Income Accounting, Multiplier Effect, Open and Closed economies. Engineering Economics: Investment Appraisal Techniques, Resource and Environmental economics. Welfare Economics: Indifference curves, Choices for the development of society. Accounting for decision-making: concepts, Elements of Costing methods and Techniques, Accounting ratios, applications to engineering.
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Definition of economics the study of how individuals and societies use limited resources to satisfy unlimited wants.
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Scarcity of resources Economists identify 4 classes of resources Land Labour Capital - financial resources, plant and building Enterprise - entrepreneur organises production, taking economic decisions & incurring risks associated with them All these factors of production are necessary for economic activity to take place. individuals and societies must choose among available alternatives.
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Economics is about the way these factors are used. A basic principle of economic analysis is that each has its price; none is obtainable for nothing. As a result, the output is not free and our consumption of goods and services is limited by our ability to pay for them. This is the basis of the economist’s concept of scarce resources. Therefore, if the factors are scarce, choices must be made to determine how they shall be employed
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Resource payments Economic Resource Resource payment land rent labor wages capital interest Enterprise profit
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Scarcity lies behind the basic questions of economics.
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