What is Applied Economics for Engineers?

Applied economics is the application of economic theory and econometrics in specific settings. Thereby applied economics for engineers is the study of economic solutions to engineering problems. The purpose of engineering economics is to assess cost benefit analysis, with the suitability of a given project, estimate its value and support it from an engineering point of view.

Importance of Applied Economics for Engineers

1. Provide understanding of the basic rationale and techniques, for applying cost-benefit analysis to engineering projects and policies.

The job of an engineer is to search for solutions to problems and assess whether the solution they found is viable or not. In order to do that engineers are taught applied economics for engineers. There may be a number of solutions for a single problem; identifying which is the best solution also comes under the job description of an engineer. An engineer not only has to learn things related to his field but he also has to take care of the cash flow and also factor in the aspect of time value of money. Among all these, the most important aspect behind studying applied economics is to understand the factor of cost, revenue and the life of a project.

Engineers face a number of problems every day and are presented with a number of solutions to those problems. At this point an engineer has to determine which is the best possible solution to the problem at hand. He has to do that