In the name of Allah the Most Gracious the Most Merciful
Course Essentials
 Assignments
Weightage 10 % Abt 8
 Quizzes
Weightage 10 % Abt 8
 Mid Term
Weightage 30 % (must pass)
(min 25/50 to qualify to take final exam
alongwith 75% attendance)
 Final
Weightage 50 % (must pass)
Course Outline (From HEC website)
 Introduction:
 Basic concept and principles of Economics, Microeconomic
theory, the problems of scarcity, Concept of Engineering
Economy
 Economic Environment:
 Consumer and producer goods, goods and services, demand
& supply concept. Equilibrium, elasticity of demand,
elasticity of supply, measures of Economic worth. Pricesupply-demand relationship. Theory of production, factors
of production, laws of returns, break-even charts and
relationships. Perfect competition, monopoly, monopolistic
competition and oligopoly, Fundamentals of Marketing.
Course Outline (Cont’d)
Elementary Financial Analysis:
Basic accounting equation. Development and
interpretation of financial statement-Income
statement, Balance sheet and cash flow. Working
capital management.
Break Even Analysis:
Revenue/cost terminologies, behaviour of costs.
Determination of costs/revenues. Numerical and
graphical presentations. Practical applications.
BEA as a management tool for achieving
financial/operation efficiency.
Course Outline (Cont’d)
Selection Between Alternatives:
Time value of money and financial internal rate of
return. Present value, future value and annuities.
Cost-benefit analysis, selection amongst materials,
techniques, design etc
Investment philosophy:
Investment alternatives having identical lives.
Alternatives having different lives. Make or buy
decisions and replacement decisions.
Course Outline (Cont’d)
Value Analysis/Value Engineering:
Value analysis procedures. Value engineering
procedures. Value analysis versus value
engineering. Advantages and applications in
different areas. Value analysis in designing and
purchasing.
Linear Programming:
Mathematical statement of linear programming
problems, graphic solution simplex procedure.
Duality problem.
Course Outline (Cont’d)
Depreciation and Taxes:
Depreciation concept, economic life, methods of
depreciations, profit and returns on capital,
productivity of capital gain (loss) on the disposal of
an asset, depreciation as a tax shield.
Business Organizations:
Type of ownership, single ownership, partnerships,
corporation, type of stocks and joint stock
companies banking and specialized credit
institutions.
Course Outline (Cont’d)
Capital Financing & Allocation:
Capital budgeting, allocation of capital among
independent projects, financing with debt capital,
financing with equity capital trading on equity,
financial leveraging.
Recommended Text Books
1. Engineering Economy
by
A. Tarquin
2. Engineering Economy
by
Degarmo
3. Economics
by
Samaulson
Economics
Economists generally define economics as
the study of how individuals and societies
use limited resources to satisfy unlimited
wants
Economics
Economists argue that the fundamental economic
problem is scarcity. Since there are not enough
resources available to satisfy everyone’s wants,
therefore, individuals and societies have to choose
amongst available alternatives.
An alternative, and equivalent, definition of
economics is that economics is the study of how
such choices are made.
Scarcity: The society has less to offer than people
wish to have.
Microeconomics Vs Macroeconomics
Microeconomics is the study of individual
economic agents and individual markets
Macroeconomics is the study of economic
aggregates i-e averages and estimates
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
What are the economic Goals?
A high level of employment
Price stability
Efficiency
An equitable distribution of income
Economic growth
Three Major Sectors of Economy
Manufacturing
Agriculture
Services
 To increase the availability and widen
distribution of basic life sustaining goods
 To raise level of
living
 To expand the range of
social choices
economic and
Common Characteristics of Developing Nations
Low levels of living characterized by
inequality, poor health and inadequate
education
Low levels of productivity
High rates of population growth and
dependency
High and rising levels of unemployment and
underemployment
Cont’d
Common Characteristics of Developing Nations
Cont’d
Substantial dependence on agricultural
production and primary products exports
Prevalence of imperfect markets and limited
information
Dominance, dependence and vulnerability in
international relations
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
Assignment 1
 Find out GDP/ Capita of at least 10 countries
of the world from various websites. It must
include Pakistan, India, Bangladesh, Sri
Lanka, Korea, USA, UK, Malaysia, China,
Australia etc..
Assignment due on 12 Oct, 2010
Assignment 2
 Find out share of three major sectors of
economy in the overall economics of at least
10 countries of the world from various
websites. It must include Pakistan, India,
Bangladesh, Sri Lanka, Korea, USA, UK,
Malaysia, China, Australia etc..
Assignment due on 19 Oct, 2010