RE 165 Real Estate Economics Due 3/15/2012
Quiz for Chapter 5: Important Economic Features of Real Estate
1. Which of the following is a characteristic of an imperfect real estate market?
A. many and equal numbers of buyers and sellers
B. highly knowledgeable buyers and sellers
C. all products are alike
D. fixed location
2. In a real estate “ seller’s market”:
A. supply exceeds demand
B. prices are declining
C. there are many qualified buyers but few properties for sale
D. mortgage interest rates are very high
3. One of the key economic features of real estate is:
A. short-run fixed supply
B. fixed demand
C. mobility
D. low unit costfixed demand
4. An increase in demand will have what short-run impact on real estate prices and rents?
A. prices and rents should decrease
B. prices should decrease, but rents should increase
C. prices and rents should increase
D. prices should increase, but rents should decrease
5. The use of real estate brokers tends to make the real estate market:
A. less than perfect
B. more imperfect
C. more nearly perfect
D. does not influence the market one way or the other
6. Multiple listing services of a local real estate association tend to make the real estate market:
A. less than perfect
B. more imperfect
C. more nearly perfect
D. does not influence the market one way or the other
7. If the demand for commercial real estate increases, but “no growth” controls prevent new construction, then rents per square foot in the short run should:
A. increase B. decrease C. remain the same D. shift downward
8. All of the following can influence the demand for real estate except:
A. population
B. mortgage interest rates
C. rates of construction
D. lifestyles
9. “Six months free rent” as a concession is in reality a:
A. reduction in rent
B. sign of an increase in the need for construction
C. sign of an increase in demand
D. sign of a decrease in supply
10. Foreign ownership of U. S. real estate:
A. provides needed capital for U. S. citizens
B. in the short run, increases government revenues
C. helps maintain real estate prices
D. does all of the above
11. Numerous and knowledgeable buyers and sellers, and neither party has control, describes which of the following?
A. perfect market
B. imperfect market
C. mixed economy
D. command economymixed economy
12. In real estate, a “buyer’smarket” usually occurs when:
A. demand exceeds supply
B. numerous properties are for sale
C. interest rates are low
D. there are plenty of qualified buyers
13. The supply of land is fixed, but in time, the intensity of land use can be increased.
A. true B. false
14. Overbuilding results when:
A. demand exceeds supply
B. lenders tighten up on construction credit
C. government imposes “no growth” controls
D. supply exceeds demand, but new construction continues
15. All other things being equal, if population increases and mortgage interest rates decline:
A. office rents should decline
B. more renters should start to buy homes
C. the economy should be heading for a recession
D. resale of existing homes should go down
16. Which of the following is considered a real estate supply variable?
A. consumer tastes
B. population
C. income
D. rate of construction
17. A change or shift in the demand for real estate can be caused by:
A. changes in the availability of mortgage credit
B. population changes
C. income changes
D. all of the above
18. According to the law of demand, as local home prices drop, the:
A. demand for homes should decrease
B. quantity of homes demanded should increase
C. supply of homes will increase in the short run
D. vacancy rate for homes should increase
19. Foreign ownership of real estate tends to increase when the: A. value of the dollar increases
B. U. S. economy and the country of the potential foreign investor are in recession
C. value of foreign currency in-creases compared to U. S. currency
D. barriers to free trade are in-creased
20. Which of the following actions by real estate agents tend to make the real estate market more competitive?
A. establishing uniform rates for sales commissions
B. encouraging more owners to list their homes for sale
C. member- only access to multiple listing information
D. not explaining information about the various options for home financing