VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING

CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________
QUESTION BANK
UNIT I BASIC ECONOMICS
PART - A
1
2
3
4
5
6
7
8
9
10

Define economics.
Classify : Wants
Explain diminishing marginal utility with an example.
Write any four features or characteristics of human wants
How would you classify the goods?
Explain any four peculiarities of land.
Define managerial economics.
Explain any two nature of economics.
What example can you find for wealth and wants.
Mention any four advantages of economics of small scale

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BTL 6
BTL 1
BTL 2
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BTL 4

11
12
13
14
15
16
17
18
19
20

Can you make the distinction between positive economics and normative economics?
Explain any four peculiarities of labour.
Define wealth.
Compare micro and macro economics.
List the main areas of application of managerial economics.
Write any four disadvantages of economies of small scale.
Define value
Explain any two nature of managerial economics.
What are the four factors of production?
Define utility
Part - B

BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 1
BTL 2
BTL 1
BTL 1

1
2
3
4
5
6
7
8
9

Can you recall the concepts of (i) Micro economics (ii) Macroeconomics (iii) Normative
economics (iv) Positive economics.
Can you Explain the nature and scope of managerial economics.
How would you apply managerial economics in solving managerial problems.
What are the nature and scope of economics.
Discuss the factors of production with its peculiarities.
Compare economic decisions and technical decisions.
How would you explain Wealth,scarcity and utility.
Can you Explain the internal and external economies of large scale.
i)Explain the law of diminishing marginal utility.

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

BTL 1
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BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________

10

ii)What evidence can you find for the nature and scope of engineering economics?
What are the advantages and disadvantages of small scale production.

BTL 4
BTL 1

Unit II DEMAND AND SCHEDULE

Part - A
1
2
3
4
5
6
7
8
9 i)
9 ii)
10
11
12
13
14
15
16
17
18
19
i)
19
ii)
20

1
2
3 i)
3 ii
4 i)

Define demand
Can you explain law of demand
Identify the factors influencing demand.
What are the assumptions of law of demand?
How is elasticity of demand used for forecasting?
Why does the demand curve slope downwards to the right?
Define elasticity of demand
How would you classify the methods used to measure the elasticity of demand?
How would you show your understanding of cross elasticity of demand.
What ideas justify government demand.
Define market demand.
What is demand schedule?
What is meant by law of supply.
What reasons would you say for change in supply?
Make the distinction between market price and normal price?
List down the factors affecting elasticity of supply.
Differentiate monopoly and monopolistic competition.
Can you recall the Factors influencing supply
How would you summarize supply curve?

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BTL 6
BTL 1
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BTL 1
BTL 2
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BTL 4
BTL 5
BTL 6
BTL 1
BTL 2

What facts would you select to show the market structure?

BTL 3

What conclusions can you draw from the assumption of the law of supply?
How would you draw a typical 'less elastic Demand curve'

BTL 4
BTL 1

Part - B
Discuss the factors determining demand.
How would you compare normal and market prices?
Can you list the different types of elasticity of demand?
What facts would you select to show the demand curve slope downwards to the right?
Explain the factors governing price elasticity of demand.

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

BTL 1
BTL 2
BTL 1
BTL 3 & 4
BTL 3

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________
4 ii)
5 i)
5 ii)
6
7
8 i)
8 ii)
9 i)
9 ii)
10
i)
10
ii)

What inference can you make from the exceptions to law of demand?
How would you measure elasticity of demand?
Describe the classification of price elasticity of demand.
How would you explain the elasticity of supply?
Demonstrate price determination in the monopolistic competition.
Write the factors affecting elasticity of supply.
How would you show your understanding of market structure?
Explain how supply and demand determine the equilibrium price. What happens if
supply curve shifts to the left?
Elaborate the features of monopoly and monopolistic competition.

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BTL 5
BTL 6
BTL 1
BTL 2
BTL 1
BTL 3 & 4
BTL 3
BTL 4

What are the assumptions and price determination in perfect competition?

BTL 5

What judgment would you make about time element in the determination of value of
market price and normal price?

BTL 6

Unit III - ORGANIZATION

Part - A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Can you list the types of banks?

What is meant by credit instrument?
What do you understand by mixed economy or public private partnership?
Mention the limitations of Credit Creation?
How would you classify the different forms of business organisation?
Explain RBI.
Define the term Open Market Operation.
How would you compare CRR and SRR.
What examples can you find for Foreign Banks.
List the functions of Central bank.
Name the state level financing institution for advancing loans to industries?
Explain state enterprise?
How would you describe the role of money in economic development?
What is meant by monetary policy?
Identify 4 examples for public sector undertaking.
What is the role of financial manager in an organization?
Define company.
Compare partnership and Joint Stock Company.
Define cash credit.

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

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BTL 5
BTL 6
BTL 1
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BTL 6
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BTL 2
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BTL 4
BTL 1
BTL 2
BTL 1

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________
20

Can you list the main functions of a commercial bank?

BTL 1

Part B
1
2
3
4
5
6
7
8
9
10

List the features of Joint Stock Company?

llustrate the various credit instruments?
Identify the functions of the central bank. (RBI)
Explain the different forms of Business organization with examples.
Discuss the various functions and services offered by commercial banks in India.
Evaluate the different types of banks?
How would you explain the monetary policy of India?
Elaborate the methods of control of Credit?
i) Differentiate Proprietorship and Partnership?
ii) Explain the characteristics of Public Corporations?
What are the merits and demerits of Private sector and co-operative organization?

BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
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Unit IV FINANCING
Part A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

What do you mean by retained earnings?

What is mean by debentures?
What are the internal sources of funds?
Can you list the sources of long term and short term finance?
Discuss the objectives of fund flow statement
Explain the rules for preparing the schedule of changes in working capital.
What do you mean Bank O/D?
What is meant by working capital?
How would you construct a Trial Balance?
Can you list the international funding agencies
Formulate profit and loss account.
Explain fund flow statement.
What do you understand by ECB?
Explain fund from operation (FFO)?
How would you prepare a balance sheet by using the different types of assets?
What are the elements of Financial Management?
How would you explain current assets and current liabilities

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

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BTL 5
BTL 6
BTL 1
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BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 1

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________
18 Can you explain bad debts?
19 Define Balance sheet?
20 What is meant by Fixed Capital?

BTL 2
BTL 1
BTL 1

Part - B
1 Following are the data of HYZ Ltd. as on 31/3/2012, prepare final accounts:
2,240
Taxes and Insurance
Purchases 1,26,440

BTL 1
126,440

Plant and Machinery

50,000

Stock (1.4.2011)

50,000

Creditors

15,840

Loan

20,000

Wages

13,560

Motor Lorry

6,500

Power

4,600

Bad debts

784

Land and Buildings

27,680

Capital a/c

Telephone Charges

2,000

Repairs and Replacements

Salaries

5,726

Drawings

Advertisement

7,600

Discount received

4,800

Debtors

16,000

Furniture

4,000

Rent received

1,146

Coal

Sales
Cash in hand

150,000

158,800
2,400
12,600

13,436

Cash at Bank

4,000

1,020

The value of stock on 31/3/2012 was Rs.60, 000.

2
3

Explain in detail about external commercial borrowings.

Construct the format of final accounts?
What are the sources of short term and long term funds? Bring out the merits and
limitations of each source?
Formulate a typical Fund Flow Statement? And what are the uses of Fund Flow
Statement?

How would you evaluate the financial institutions available in industry to meet the
financial needs. Also outline the objectives of each of these institutions.

The following balances were extracted from the books of Prasad on 31st March 1994.
Details
Rs.
Details
Capital
50,000
Creditors
Drawings
4,000
Bad debts

BTL 2
BTL 3
BTL 4
BTL 5
BTL 6

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

Rs.
5,000
1100

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________
General Expenses
5,000
Loan
15,760
Buildings
22,000
Sales
130,720
Machinery
18,680
Purchases
94,000
Stock
32,400
Motor Car
4,000
Power
4,480
Short Term Borrowings
1,800
Taxes & Insurance
2,630
Commission Received
2,640
Wages
14,400
Car Expenses
3,600
Debtors
12,560
Bills Payable
6,700
Bank Overdraft
6,600
Cash
160
Postage
210
Stock on 31st march 1994 was valued at Rs.47000.Outstanding wages Rs.600.Create a depreciation of 10
% on building. Prepare the financial accounts for the year ended on 31st March 1994.
8

Explain the different types of financing and also explain the need for financial analysis.

i)Explain the procedure to be followed by an organization to issue a debenture?

BTL 3

ii)Explain in detail about Government budgeting support and international finance

corporation.
10
i)
A company has reported a current profit of Rs.270000 after taking into
consideration the following: Calculate Funds from operation.
Particulars
Loss on sale of furniture
Premium of redemption of debentures
Discount on issue of debentures
Depreciation on Machinery
Goodwill Written off
Interim Dividend paid
Gain from sale of land
Dividend income on investments
Transfer to general reserve
Preliminary expenses written off
Profit on revaluation of investments
10
ii)

Explain the following:

a)
Trial Balance and
b)
Profit and loss account.

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

BTL 2

BTL 4

BTL 1

(Rs)
20000
10000
20000
25000
20000
30000
40000
5000
50000
20000
13000
BTL 1

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________

Unit V- COST AND BREAK EVEN ANALYSIS

Part - A
1
2
3
4
5

12
13
14
15
16
17
18
19
20

Define Angle of Incidence?

What is meant by marginal cost?
Draw the behaviour of variable costs?
State the factors influencing pricing decisions
Can you identify the different types of feasibility study?
If a company invests Rs.2,00,000 with Rs.40,000 as its annual earnings, what is the PBP of
the company?
Define explicit and implicit cost.
What is meant by going rate pricing?
What examples can you find for activity based costing?
Compare bid pricing and pricing for a rate of return?
What is the function of feasibility study?
If the total cost of the firm is Rs.1,00,000 and fixed cost is Rs.40,000, what is the variable cost
of the firm?
Define capital budgeting.
What is meant by margin of safety?
How would you use Break Even Analysis?
Explain any two pricing methods in practice.
Define IRR
What is meant by CVP analysis?
Can you recall the managerial uses of break even analysis?
Define NPV

1
2
3
4

Part - B
How would you describe Price discrimination?
How would you classify the pricing methods in practice?
Explain marginal cost pricing and going rate pricing.
Define Break Even Point. Draw breakeven point and explain its components?

BTL 1
BTL 2
BTL 3
BTL 4

Explain the different techniques used in capital budgeting with respective advantages and
disadvantages.

BTL 5

From the following data, Calculate the PBP and NPV (at 7% discounting factor) for the two
projects A &B and give your suggestions:

BTL 6

6
7
8
9
10
11

Year

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

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BTL 6
BTL 1
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BTL 6
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BTL 4
BTL 1
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BTL 1
BTL 1

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________

7
8
9

10
7
8
9

10

Project A
1,00,000(Outflow)
45,000
60,000
Project A
2,00,000(Outflow)
85,000
70,000
How would you explain the importance of studying the short run and long run costoutput relationships?
Explain the different types of Costing?
i)From the following particulars calculate:
a) Contribution
b) P/V ratio
c) Break even point in units and in rupees
d) What will be the selling price per unit if the break even point is brought down to
25,000 Units?
Particulars
Amount
Fixed Expenses
1,50,000
Variable cost per Unit
10
Selling price per Unit
15
ii)State some managerial uses and assumptions of Break Even Analysis?
How would you explain Project Feasibility?
How would you explain the importance of studuying the short run and long run costoutput relationships?
Explain the different types of Costing?
i)From the following particulars calculate:
a) Contribution
b) P/V ratio
c) Break even point in units and in rupees
d) What will be the selling price per unit if the break even point is brought down to
25,000 Units?
Particulars
Amount
Fixed Expenses
1,50,000
Variable cost per Unit
10
Selling price per Unit
15
ii)State some managerial uses and assumptions of Break Even Analysis?
How would you explain Project Feasibility?

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

20,000
90,000
BTL 1
BTL 2
BTL 3

BTL 4
BTL 1
BTL 1
BTL 2
BTL 3

BTL 4
BTL 1

DEPARTMENT OF MBA

VALLIAMMAI ENGINEERING COLLEGE

DEPARTMENT OF CIVIL ENGINEERING
CE 2451 ENGINEERING ECONOMICS AND COST ANALYSIS
______________________________________________________________________________

Ms.L.SUJATHA /AP(S.G) & V.SELVA LAKSHMI /AP(O.G)

DEPARTMENT OF MBA