Engineering Economics A - E

Academic Year 2023/2024 - Teacher: SALVATORE CANNELLA

Expected Learning Outcomes

"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.
“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.
"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.
"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.
“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.

Course Structure

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.

Required Prerequisites

Basic logical-mathematical skills. For the purpose of applying the principles of economic optimization, it is useful to have knowledge of: the concept of derivative of a real function of a real variable; the geometric meaning of the derivative; derivatives of elementary functions; operations with derivatives.

Attendance of Lessons

The attendance of classes is strongly recommended.

Detailed Course Content

Part 1 - Microeconomics: the study of economic behaviors of individual economic agents, focusing on consumer choices, business decisions, and market dynamics.

Part 2 - Macroeconomics: the study of relationships among aggregate economic variables. Economic actors (firms, consumers, government) are no longer considered from an individual perspective but rather as a collective of economic entities.

Part 3 - Financial and Economic Analysis of Projects: the application of decision criteria (Net Present Value, Internal Rate of Return, Payback, etc.) for evaluating various investment alternatives.

Textbook Information

Slides provided by the instructor through the Studium page of the course. Additionally, after the classroom exercises, exercise solutions will be published on the Studium page of the course. Furthermore, please carefully study all support documents published on the Studium page of the course (e.g., guidelines for requesting assistance, exam instructions, information on course materials, etc.).

Recommended teaching materials for Microeconomics and Macroeconomics:

Slides published on Studium
O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Economics: Principles, Applications, and Tools, Pearson.

Recommended teaching materials for Economic Analysis of Engineering Projects:

Slides published on Studium."

Course Planning

	Subjects	Text References
1	Introduction: What is Economics	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
2	The fundamental principles of economics	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
3	Demand, supply and market equilibrium	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
4	Elasticity: A measure of responsiveness	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
5	Production technology and costs	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
6	Perfect competition	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
7	Monopoly	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
8	Measuring the output and income of a nation	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
9	Inflation and unemployment	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
10	Money and Banking System	Material provided by the instructor. For further readings: O’SULLIVAN A., SHEFFRIN S.M., PEREZ S.J., BIANCHI C. (2015). Elementi di Economia, Pearson.
11	Economic and Financial Analysis of Investments: Cash Flows and Key Decision Criteria	Material provided by the instructor. For further readings: SULLIVAN W.G., WICKS, E.M., LUXHOJ (2006). Economia applicata all’ingegneria. Pearson.
12	Economic and Financial Analysis of Investments: Choosing between Project Alternatives	Material provided by the instructor. For further readings: SULLIVAN W.G., WICKS, E.M., LUXHOJ (2006). Economia applicata all’ingegneria. Pearson.

Learning Assessment

Learning Assessment Procedures

The exam consists of a written test on the theory of Microeconomics and Macroeconomics, as well as practical exercises on Microeconomics and Economic Evaluation of Engineering Projects. The test lasts for 50 minutes and includes the following sections:

- 8 open-ended and/or multiple-choice questions (16 points)

- 1 practical exercise on Microeconomics (8 points)

- 1 practical exercise on Economic Evaluation of Engineering Projects (8 points)

Each question can be awarded a maximum score of 2, and each exercise can earn 8 points, making a total maximum score of 32 points. If a student scores above of 30, they will be awarded a mark of 30 cum laude.

Moreover, students have the option to take a midterm test at the end of the course, following the same assessment format as the final exam.

The exam schedule will be published on the degree course website.

Please note that the assessment of learning may also be conducted online if necessary. In such a case, the duration of the written test may be subject to change.

Examples of frequently asked questions and / or exercises

The following list is purely exemplary.

Microeconomics:

What is the difference between elastic demand and inelastic demand?
When does oversupply occur?
What criterion does a perfectly competitive firm follow to determine the level of production?

Macroeconomics:

What is the difference between real GDP and nominal GDP?
What are the economic institutions that create money and how?
What is meant by structural unemployment?

Project Analysis:

Calculation of the Net Present Value (NPV) of a project.
Calculation of the Internal Rate of Return (IRR) of the project.
What are the advantages of the payback method?

VERSIONE IN ITALIANO

Degree Course in

Computer Engineering