In the name of Allah the Most Gracious the Most

Merciful

QUIZ # 2
List common characteristics of

developing nations.
List three objectives of economic

development.

MACROECONOMIC POLICIES
Growth policy
Investment Policy
Human Resource Development
Trade Policy
Exchange Rate Policy
Fiscal Policy
Taxation Policy
Public Expenditure Policy

Monetary Policy
Employment and Poverty Trends & Policy

Three Major Sectors of

Economy
Manufacturing
Agriculture

Services

Traditional Measures of
Economic Development
Growth and Levels of Per Capita Income
Declining share of Agriculture and rising

share of Manufacturing sector

Improvement in Social Indicators such

as Literacy, Schooling, Health

Conditions, Services and Provision of
Housing
Trickle Down of Growth

History of Engineering
Economics
Arthur M. Wellington founder of engineering
economics, by profession a civil engineer, wrote a book
the economic theory of location of railways in 1887.
His area of interest was role of railways building in USA
J C.L.Fish and O.B.Goldman both evaluated engineering

structures from the perspective of actuarial

mathematics.
Fish formulated an investment model related to the

bond market
Goldman in his book Financial Engineering proposed

a compound interest procedure for determining

comparative values over a period of time
Contd

History of Engineering
Economics

Contd

Eugene L.grant in 1930 in his book principles of

engineering economics discussed the

importance of Judgment factors and short term
investment evaluation as well as conventional
comparisons of long term investments in capital
goods based on compound interest calculations
Eugene L.Grant could be called as the
father of engineering economics.

Engineering
Economics
Engineering economics is the application of
economic techniques for the evaluation of design
and engineering alternatives. The role of
engineering economics is to: assess the appropriateness of a given project
estimate its value
justify it from an engineering point of view

Engineering economy involves technical analysis,

with emphasis on the economic aspects and has

the objective of assisting in decision making
Contd

Engineering
Economics
Engineering
economy involves the systematic

Contd

evaluation of the economic merits of proposed

solutions to engineering problems. To be economically
acceptable, solutions to engineering problems must
demonstrate a positive balance of long term benefits
over long term cost and they must also:
Promote the wellbeing and survival of an organization
Embed use of creative and innovative technology and

ideas
Permit identification and scrutiny of their estimated out

comes
Translate profitability to the lowest tier through a valid

and acceptable measure of merit

Engineering
Economics
The
application of economic principles to
engineering problems, for example in
comparing the comparative costs of two
alternative capital projects or in determining the
optimum engineering course from the cost
aspect. It means that we need to know about :Optimal cost-effectiveness
Alternative possibilities

Engineering
Economics

What we must know?

Time

value of money

Estimation

of cash flows

Quantitative

measurements of

profitability
Systematic

comparison of alternatives

Assignment 2
Find out share of three major sectors of economy
in the overall economics of at least 15 countries
of the world from various websites. It must
include Pakistan, India, Bangladesh, Sri Lanka,
Korea, USA, UK, Malaysia, China, Australia etc..
Provide page reference of website as applicable.
Assignment due on 26 Oct, 2010