,Engineering Economics, 5e (Fraser)
Chapter 1 Engineering Decision Making
1.1 Multiple Choice Questions
1) Evaluation of an engineering project involves the following constraints:
A) financial, environmental, social and political constraints.
B) technical and financial constraints.
C) technological and social constraints.
D) time and money constraints.
E) budget and time constraints.
Answer: A
Diff: 1 Type: MC Page Ref: 3
Topic: 1.1. Engineering decision making
Skill: Recall
User1: Qualitative
2) Engineering economics is
A) a body of knowledge to determine which of several alternative is technically best.
B) a collection of techniques for quantitative analysis to select a preferable alternative from several
technically viable ones.
C) a set of tools to calculate an engineering project's costs.
D) a set of rules to evaluate an engineering project.
E) a set of methods to determine an engineering project's costs in terms of time value of money.
Answer: B
Diff: 1 Type: MC Page Ref: 3
Topic: 1.2. What is engineering economics
Skill: Recall
User1: Qualitative
3) From an economic standpoint, any engineering project can be thought of in terms of
A) its costs and benefits over time.
B) its constraints.
C) its receipts and disbursements.
D) its revenues and profits over time.
E) its investment and costs over time.
Answer: A
Diff: 1 Type: MC Page Ref: 3
Topic: 1.2. What is engineering economics
Skill: Recall
User1: Qualitative
,4) In the context of your textbook, abstraction means
A) a study.
B) a method
C) a methodology
D) a model.
E) an approach
Answer: D
Diff: 1 Type: MC Page Ref: 6
Topic: 1.4. Dealing with abstractions
Skill: Recall
User1: Qualitative
5) When an engineer prepares a feasibility study, what economic information must she possess in order
to do it correctly?
A) engineering specification
B) expert opinion about this project
C) macroeconomic situation in the world
D) potential future costs and benefits of the project
E) the level of uncertainty
Answer: D
Diff: 2 Type: MC Page Ref: 6
Topic: 1.4. Dealing with abstractions
Skill: Applied
User1: Qualitative
6) In which of the following problems do you need engineering economics?
A) to choose a course in your program
B) to chose the right textbook
C) to decide whether to borrow money from parents or from a bank
D) to decide whether or not to buy a car
E) to decide where to spend summer vacation
Answer: C
Diff: 2 Type: MC Page Ref: 6-8
Topic: 1.4. Dealing with abstractions
Skill: Applied
User1: Qualitative
7) Which of the following statements best describes the moral issues faced by engineers while
evaluating projects?
A) moral issues are clearly defined in engineering design
B) moral issues do not matter as long as technical goals are achieved
C) your employer is the only person who can define what is ethical or unethical
D) there are no general answers to moral questions
E) since moral issues are value judgements they must not be taken into consideration
Answer: D
Diff: 3 Type: MC Page Ref: 9-10
Topic: 1.5. The moral question: Three true stories
Skill: Applied
User1: Qualitative
8) The best way to find some answers to difficult moral questions in engineering design and project
, evaluation is
A) to ask your friends.
B) to consult professional engineering associations.
C) to search the web.
D) to read newspapers.
E) to read professional textbooks.
Answer: B
Diff: 2 Type: MC Page Ref: 9-10
Topic: 1.5. The moral question: Three true stories
Skill: Recall
User1: Qualitative
9) Stan borrowed $5 000 one year ago. Now he has to repay $5 100. The interest Stan pays is
A) $5 100
B) 102%
C) $100
D) 2%
E) $5 000
Answer: C
Diff: 2 Type: MC Page Ref: 6-8
Topic: 1.4. Dealing with abstractions
Skill: Applied
User1: Quantitative
10) Joan borrowed $1 000 one year ago. Now she has to repay $1 100. Therefore, the interest rate she
pays is
A) $1 000
B) $1 100
C) $100
D) 110%
E) 10%
Answer: E
Diff: 2 Type: MC Page Ref: 6-8
Topic: 1.4. Dealing with abstractions
Skill: Applied
User1: Quantitative
11) All but one of the following are economic criteria to evaluate an engineering project. Which one is
the non-economic criterion?
A) maximum profit
B) minimum cost
C) minimum pollution
D) maximum rate of return
E) minimum payback period
Answer: C
Diff: 2 Type: MC Page Ref: 2-6
Topic: 1.2. What is engineering economics
Skill: Applied
User1: Qualitative
12) Analyze the following statement: "There is 50% probability of raining". This statement concerns
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