Introduction to Economics
INTRODUCTION TO ECONOMICS
EconomicsEconomics is the science that deals with the production and consumption of goods and services and the distribution and rendering of these for human welfare.
The following are the economic goals or objectives.
• A high level of employment
• Price stability
• Efficiency
• An equitable distribution of income
• Growth
Engineering Economics
It is defined as “A set of principles, concepts, techniques and methods by which alternatives within a project can be compared and evaluated for the best monetary return”.Scope of engineering economics
• Engineering economics plays a very major role in all engineering decisions.• It is related with the financial analysis of the projects, products and processes that engineers design.
• Engineering economics helps an engineer to assess and compare the overall cost of available alternatives for engineering projects.
• According to the analysis an engineer can take decision from the alternative which is more economic.
• Engineering economics concepts are used in the fields for improving productivity, reducing human efforts, controlling and reducing cost.
• Engineering economics provides a number of tools and techniques to solve engineering problems.
• Engineering economics helps to understand the market conditions and economic environment in which firm is working.
• Engineering economics provide basis for resource allocation problem.
FLOW IN AN ECONOMY
• The flow of goods, services, resources and money payments in a simple economy shown in fig.• Households and business firms are the two major entities in a simple economy.
• Business organizations use various economic resources such as land, labour and capital which are provided by households to produce consumer goods and services which will be used by them.
• Business firms make payment to the money to the households for receiving various resources.
• The households in turn make payments to the business organizations.
