Engineering Economics A - E

1. "Knowledge and understanding". The course introduces the knowledge of the principles of economic rationality and provides the basic methods for business decisions in the field of cost analysis, market analysis, and economic analysis of engineering design. Finally, the student is introduced to the main macroeconomic aggregates and basic models for the analysis of economic systems.
2. “Applying knowledge and understanding”. Upon completion of the course, students must be able, for each economic decision, to identify the cost items and the expected benefits. They must also be able to identify the variables of the macroeconomic context that are relevant to business decisions. Finally, they will have to be able to apply the main criteria for evaluating the economic value of a project.
3. "Making judgments". Based on the basic principles learned, the student will be able to autonomously investigate further aspects relating to business and engineering decisions in the economic-financial field.
4. "Communication skills". At the end of the course, the student must be able to communicate the reasons underlying the analysis of costs, of the market, and of engineering projects using specialized language.
5. “Learning skills”. The principles of economics provided at the beginning of the course will be a basis for conveying further contents in the microeconomic, macroeconomic and engineering project fields. They can be used by the learner to refine and deepen their skill set through independent learning and knowledge acquisition.

The course is organised as a mix of theoretical lectures (concerning the principles of Microeconomics, Macroeconomics, and the foundations of project appraisal) and tutorials during which exercises on the course topics will be discussed.

N.B. Should teaching be carried out in mixed mode or remotely, it may be necessary to introduce changes with respect to previous statements, in line with the programme planned and outlined in the syllabus. Learning assessment may also be carried out on line, should the conditions require it.

ENGINEERING ECONOMICS

ENGLISH

Economics of the firm and of markets

How economists think. The logic of costs and benefits. The market. Individual and aggregate demand. Theory of production: the production function and short and long run costs. Market structures: perfect competition, monopoly, imperfect competition. Strategic interaction in oligopolistic markets.

Contemporary economics.

Macroeconomic variables: GDP, price level and inflation, employment and unemployment, balance of payments, public budget, money, financial markets and interest rates. The determination of the national income in the short run. The economic cycle. The AD-AS model. Economic Policy. Principles of open economies.

Project Analysis
Formulating investment alternatives. Project costs. Some representative short-term decisions (make-or-buy, choice of materials). Principles of financial mathematics. Decision Criteria: NPV, IRR, payback, other criteria. Choosing among alternative projects. Capital depreciation. Taxation. Economic evaluation of public sector projects.

For Microeconomics and Macroeconomics: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.

For Project Analysis: Learning material will be provided by the instructor. For more more advanced material see: SULLIVAN W.G., WICKS, E.M., LUXHOJ (2006). Economia applicata all’ingegneria. Pearson Prentice-Hall (optional)