Introduction to Economic Decision Making for Engineers

03 4045

Time of lectures and exercises: Tuesdays, 14:30-17:30.

Detailed description (English)

Syllabus in Hebrew and English

Midterm grades

Midterm questions & solutions

Final alef grades

Lecture note sections to be covered (links to Lecture Notes below)

  • Time-Value of Money, pp.3-15: time-value of money.
  • Time-Value of Money, pp.16-21: applications of time-money relations.
  • Time-Value of Money, pp.22-25:  uncertain profit rate, i.
  • Time-Value of Money, pp.26-31: uncertain yearly profit, A. 
  • Time-Value of Money, pp.32-33: uncertain i and A. 
  • Time-Value of Money, pp.34-43: present and future worth with uncertainty.
  • Time-Value of Money, pp.44-51: strategic uncertainty.
  • Time-Value of Money, pp.52-56: opportuneness.
  • Benefit-Cost Ratio,  pp.2-4: incommensurate benefits and costs.
  • Benefit-Cost Ratio,  pp.5-18: monetizing the benefit-cost ratio.
  • Benefit-Cost Ratio,  pp.19-32: BCR with incommensurate benefits and costs.
  • Price Changes, p.4: consumer price index.
  • Price Changes, pp.6-12: nominal and real prices.
  • Price Changes, pp.13-26: engineering decisions with inflation.
  • Price Changes, pp.26-37: foreign exchange rates.
  • Portfolio management, pp.2-3: mean-variance analysis.
  • Portfolio management, pp.4-9: info-gap extension of mean-variance analysis.
  • Portfolio management, pp.10-18: value at risk.
  • Forecasting, pp.2-19.
  • Special Topic 1: Behavioral response to feedback (ro02.pdf, section 17).
  • Special Topic 2: Strategic asset allocation (ro02.pdf, section 15).

Lecture Notes

Money-Time Relationships and Their Applications

The Benefit-Cost Ratio

Price Changes Inflation and Foreign Exchange

Portfolio Management

Forecasting

Behavioral Response to Feedback

Strategic Asset Allocation

Exercises

Homework exercises on Economic Decision Making for Engineers

Homework exercises on  Info-Gap Risks in Project Management

Exercises are in file “Homework exercises on Economic Decision Making for Engineers” unless indicated otherwise.

Homework #1: Problems 1-5. Solutions to Homework #1.

Homework #2: Problems 9, 11. Solutions to Homework #2.

Homework #3: Problems 12, 13. Solutions to Homework #3.

Homework #4: Problem 28. Problem statement. Solution to Homework #4.

Homework #5: Problem 13, a,b (and c). See solution above.

Homework # 6: Problem 41 (a) – (h). Problem statement and solution of homework #6.

Homework # 7: Midterm exam. Solutions above.

Homework # 8: Problems 15 and 16. Solutions to homework #7.

Homework #9: Problems 17 and 27. Solutions to homework #9.

Homework # 10: Solutions to problems 20, 39 (a), (e)-(h).

Homework #11: Problem 40 (f)-(i). Solution to problem 40.

Homework #12: Problem 21, 29. Solutions to problem 21 and to problem 29.

Homework #13: Problems 5, 6, 4a in Info-Gap Risks in Project Management.

Homework #14. Problem 86 (a)-(c) in Problem Set on Robustness and Opportuneness.

File with link to recording of lecture 1.

File with link to recording of lecture 2.

File with link to recording of lecture 3.

File with link to recording of lecture 4.

Direct link to recording of lecture 5.

File with link to lecture 6.

File with link to lecture 7.

File with link to lecture 8.

File with link to lecture 9.

File with link to lecture 10.

File with link to lecture 11.

File with link to lecture 12.