ECEA110 FE Concepts PDF

1. What does the law of supply and demand state? A. Prices are fixed regardless of supply and demand. B. Supply has no impact on prices. C. Prices are determined by the relationship between supply and demand. D. Demand does not influence prices. Answer: C 2. Which term describes a sc...

1. What does the law of supply and demand state? A. Prices are fixed regardless of supply and demand. B. Supply has no impact on prices. C. Prices are determined by the relationship between supply and demand. D. Demand does not influence prices. Answer: C 2. Which term describes a scenario where the quantity demanded changes significantly due to a small change in price? A. Oligopoly B. Perfect competition C. Inelastic demand D. Monopoly Answer: C 3. In a situation where supply is less than demand, what term is used to describe this condition? A. Perfect competition B. Shortage C. Surplus D. Equilibrium point Answer: B 4. What does the profession of engineering involve, according to the Accreditation Board for Engineering Technology? A. Studying and practicing mathematical and natural sciences without specific goals B. Developing ways to manipulate materials and forces of nature for personal gain C. Exploring the mathematical and natural sciences for personal benefit D. Utilizing materials and forces of nature economically Answer: D 5. According to the Principles of Engineering Economy, what is essential when evaluating alternatives? A. Ignoring relevant criteria B. Using a consistent viewpoint C. Avoiding risk and uncertainty D. Focusing on similarities Answer: B 6. What should be explicit in the evaluation of proposed engineering solutions? A. Benefits only B. Short-term costs C. Risk and uncertainty D. Innovative ideas Answer: C 7. What is the primary focus of Engineering Economy when evaluating proposed solutions? A. Ignoring all relevant criteria B. Encouraging risky ventures C. Systematic evaluation of economic merits Systematic evaluation of economic merits D. Promotion of short-term profits Answer: C 8. Which of the following is NOT considered a type of Marketing in the text provided? A. Consumer Goods Marketing B. Service Marketing C. Marketing a product D. Marketing Strategy Answer: A 9. Which of the following does NOT fall under the category of Consumer Goods? A. Clothing B. Daily household items C. Technology gadgets D. Food Answer: C 10. What type of demand exists when there is an equal change in price and quantity demanded? A. Elastic Demand B. Inelastic Demand C. Unitary Demand D. Perfectly Inelastic Demand Answer: C 11. Which factor does NOT influence demand? A. Price Expectation B. Income C. Population D. Production Cost Answer: D 12. What does Perfect Competition refer to in the market situation? A. A market with colluding sellers controlling prices B. A market with only one dominant seller C. A market with no restrictions on new vendors and a large number of suppliers D. A market with few vendors and high barriers to entry Answer: C 13. What is the main characteristic of Inelastic Demand? A. Equal change in price and quantity demanded B. High responsiveness of quantity demanded to price changes  C. Lesser change in quantity demanded in response to price change D. No change in quantity demanded despite price changes Answer: C 14. What is the role of a seller in the market? A. Provide financial security to buyers B. Purchase goods from consumers C. Make purchasing decisions for households D. Sell products, goods, or services in exchange for money Answer: D 15. How do buyers benefit in a perfect competition market? A. By experiencing inadequate information about product choices. B. By enjoying reduced prices as a result of competition. C. By having exclusive access to premium products. D. By facing higher prices due to limited sellers. Answer: B 16. What is the result when the supply and demand are equal according to the law of supply and demand? A. Equilibrium is achieved B. Prices will fall C. Prices will rise D. Customers will buy less Answer: A 17. What is the effective rate of interest? A. The actual or exact rate of interest on the principal during one year B. The nominal rate of interest C. The rate of interest compounded monthly D. The rate of interest compounded annually Answer: A 18. What does the nominal rate of interest specify? A. The total interest accrued B. The rate of interest and the number of interest periods in one year C. The actual rate of interest D. The principal amount borrowed Answer: B 19. What is the result of compound interest? A. Interest on the principal only B. No interest is accrued C. Interest on accrued interest only D. Interest on the principal and accrued interest  Answer: D 20. What is Perpetuity? A. A series of equal cash flows occurring over a specified number of periods B. A series of equal cash flows occurring over an infinite number of periods C. A series of unequal cash flows occurring over a specified number of periods D. A series of cash flows occurring at the beginning of each period Answer: B 21. What is the rate of interest that specifies the rate of interest and a number of interest periods in one year? A. Exact Rate of Interest B. Nominal Rate of Interest C. Effective Rate of Interest D. Ordinary Rate of Interest Answer: B 22. What is simple interest calculated on? A. The total amount borrowed plus interest B. Only the interest accrued in preceding periods C. Principal and accrued interest D. Only the principal Answer: D 23. What is the assumption made in Ordinary Simple Interest? A. Each month contains 31 days and each year has 366 days B. Each month contains 29 days and each year has 364 days C. Each month contains 28 days and each year has 365 days D. Each month contains 30 days and each year has 360 days Answer: D 24. What type of interest is calculated on the principal plus total amount of interest accumulated in the previous period? A. Ordinary Simple Interest B. Simple Interest C. Exact Simple Interest D. Compound Interest Answer: D 25. What is the purpose of depreciation in terms of capital investment? A. To provide for the recovery of capital invested in physical property B. To decrease the market value of a property C. To increase the value of physical property D. To determine the salvage value of an asset Answer: A 26. What is the value of a property that is determined by a disinterested third party? A. Fair Value B. Book Value C. Market Value D. Utility or Use Value Answer: A 27. What is the price that can be obtained from a property after it has been used? A. Salvage Value B. Scrap Value C. Utility or Use Value D. Market Value Answer: A 28. What is the term for the decrease in value of a fixed asset due to wear and tear? A. Book Depreciation B. Market Depreciation C. Fair Depreciation D. Physical Depreciation Answer: D 29. What is the year when the scrap value is equal to the book value? A. Depreciation Year B. Salvage Year C. Market Value Year D. Fair Value Year Answer: B 30. What is the purpose of the Sinking Fund Method? A. To determine the physical life of a property B. To compute depreciation using a fixed percentage C. To determine the economic life of a property D. To present the idea of annuity in computing depreciation Answer: D 31. What is the primary purpose of depreciation in terms of capital recovery? A. To provide for the recovery of capital which has been invested in physical property B. To establish the fair value of a property C. To determine the salvage value of an asset D. To enable the cost of depreciation to be charged to the cost of producing products or services Answer: A 32. What is the main cause of depreciation?  A. Technological Depreciation B. Functional Depreciation C. Economic Depreciation D. Physical Depreciation Answer: D 33. What is the main reason for Functional Depreciation? A. Decrease in the value of a property due to the gradual extraction of its contents B. Obsolescence of the asset C. Changes in price level D. Physical wear and tear Answer: B 34. What is the term for the length of time during which a property is capable of performing the function for which it was designed and manufactured? A. Physical Life B. Economic Life C. Useful Life D. Monetary Life Answer: A 35. What is the term for the length of time during which a property may be operated at a profit? A. Functional Life B. Monetary Life C. Economic Life or Useful Life D. Physical Life of a Property Answer: C 36. Which method of determining depreciation uses the year’s digit (in reverse order) to compute for depreciation? A. Sum-of-Years’ Digit Method B. Sinking Fund Method C. Declining Balance Method D. Straight Line Method Answer: A