Unit 1 Introduction to Economics - Flow in an economy, Law of supply and demand, Fixed,

8 lecture hours

• Marginal & Average Costs
• Sunk Costs
• Opportunity Costs
• Recurring and Nonrecurring Costs
• Incremental Costs
• Cash Costs vs Book Costs
• Concept of Engineering Economics – Engineering efficiency
• Economic efficiency
• Scope of engineering economics – Element of costs
• Marginal cost
• Marginal Revenue
• Sunk cost
• Opportunity cost
• Process planning

Unit 2 Cash Flow - Methods of comparison of alternatives – present worth method (Revenue

8 lecture hours

• dominated cash flow diagram)
• Future worth method (Revenue dominated cash flow diagram
• cost dominated cash flow diagram)
• Annual equivalent method (Revenue dominated cash flow diagram
• rate of return method
• Benefit-Cost Ratio Analysis
• Sensitivity and Break-even analysis – V ratio
• Examples in all the methods

Unit 3 Inflation And Price Change - Definition, Effects, Causes, Price Change

8 lecture hours

• with Indexes
• Types of indexes
• Composite vs Commodity Indexes
• Use of Price Indexes in Engineering Economic Analysis
• Cash Flows that inflate at different Rates
• Case Study

Unit 4 Worth Analysis

• End-Of-Year Convention
• Viewpoint of Economic Analysis Studies
• Borrowed Money Viewpoint
• Effect of Inflation & Deflation
• Economic Criteria
• Applying Present Worth Techniques
• Multiple Alternatives
• Future Worth Analysis. 6 Subject Code: 3144201 w.e.f