A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
✅ The correct answer is option A.
Engineering Economy MCQs
12. What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the gradual extraction of its contents ?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
✅ The correct answer is option A.
13. In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes ?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
✅ The correct answer is option B.
14. In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
✅ The correct answer is option A.
15. What refers to the amount of a product made available for sale ?
A. Supply
B. Demand
C. Product
D. Good
✅ The correct answer is option A.
16. What is the type of annuity that does not have a fixed time span but continues indefinitely or forever ?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
✅ The correct answer is option B.
17. What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
✅ The correct answer is option A.
18. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the tinned wire, it will be P 1.15. A 100- pair cable made up with enameled wire cost P 0.55 per linear foot and those made up of tinned wire cost P 0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the same ?
A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
✅ The correct answer is option A.
19. Capitalized cost of a project is also known as ____________________?
A. Infinite cost
B. Life cycle cost
C. Life cost
D. Project cost
✅ The correct answer is option B.
20. First Benchmark Publishing’s gross margin is 50% of sales. The operating costs of the publishing are estimated at 15% of sales. If the company is within the 40% tax bracket, determine the percent of sales is their profit after taxes ?
A. 21 %
B. 20 %
C. 19 %
D. 18 %
✅ The correct answer is option A.