Real Estate Course Chapter 19

Question 1

Market indicators include

Answer 1

price levels, vacancy rates, and sales volume.

Question 2

The real estate market is unusually slow to respond to changes in supply and demand.

Answer 2

True

Question 3

As defined by the Census Bureau, a household consists of at LEAST two persons occupying a separate housing space.

Answer 3

FALSE. A household, as defined by the Bureau of the Census, U.S. Department of Commerce, is ANY PERSON OR GROUPS OF PERSONS occupying a separate housing space.

Question 4

Governments can exercise direct controls like zoning or indirect controls like growth policies to influence the real estate market.

Answer 4

True

Question 5

As occupancy rates increase, rental rates tend to decrease.

Answer 5

FALSE. As occupancy rates increase, rental rates tend to increase, and apartment dwellers who have been waiting to buy homes of their own are given impetus to start looking for houses for sale and move out of apartments

Question 6

Heterogeneity is a term that refers to the uniqueness of land.

Answer 6

TRUE. Real estate is unique. No two tracts of land are identical. The uniqueness of land is referred to as heterogeneity.

Question 7

The variables that influence SUPPLY are

Answer 7

1) availability of skilled labor
2) availability of construction loans and financing
3) availability of land
4) availability of materials

Question 8

The variables that influence DEMAND are

Answer 8

1) Price of real estate
2) Population numbers and household composition
3) Income of consumers
4) Availability of mortgage credit
5) Consumer tastes or perferences

Question 9

A seller’s market develops when the supply and demand equilibrium is upset by excess demand.

Answer 9

True

Question 10

The price of real estate is a variable that influences the supply of real estate.

Answer 10

FALSE. The price of real estate influences the demand for real estate, not its supply

Question 11

The availability of construction loans influences the supply of real estate.

Answer 11

TRUE. The variables that influence supply are availability of skilled labor, construction loans and financing, land, and materials.

Question 12

The supply of real estate is influenced by the availability of mortgage credit.

Answer 12

FALSE. The variables that influence supply are availability of skilled labor, construction loans and financing, land, and materials. Availability of mortgage credit is a variable that influences demand.

Question 13

Which characteristic does NOT describe the real estate market?
A)The market is slow to respond to changes in supply and demand
B)Land is permanent
C)Land is homogeneous
D)The government uses indirect controls

Answer 13

C) LAND IS HOMOGENEOUS. Real estate is heterogeneous; no two tracts of land are identical.

Question 14

The typical homebuyer today is concerned primarily with the

Answer 14

AMOUNT OF THE MONTHLY MORTGAGE PAYMENT

Question 15

315 apartments are rented in a 350-unit apartment building. What is the building’s occupancy rate?
 A)95 percent
 B)90 percent
 C)80 percent
 D)75 percent

Answer 15

90 PERCENT. 315 rented units ÷ 350 total units = .90 or 90 percent occupancy rate.

Question 16

Government controls influence the real estate market both directly and indirectly. An example of an indirect control is
 A)building codes.
 B)monetary policy.
 C)zoning ordinances.
 D)building moratoriums.

Answer 16

B) MONETARY POLICY

Question 17

What is meant by the phrase “the automatic working of the system”?

Answer 17

The marketplace of producers and consumers interact to determine what products should be produced and at what cost.

Question 18

Factors that affect the supply side of the real estate market do NOT include availability of
 A)land.
 B)skilled labor.
 C)mortgage credit.
 D)material.

Answer 18

c) MORTGAGE CREDIT

Question 19

What is a building’s vacancy rate if 621 units are rented in a 690-unit building?
 A)10 percent
 B)90 percent
 C)75 percent
 D)25 percent

Answer 19

The answer is 10 PERCENT.

690 total units – 621 rented units = 69 vacant units. 69 units ÷ 690 total units = .10 or 10 percent vacancy rate.

Question 20

Which statement is NOT associated with the economic concept of demand?
A)Changes in price cause an inverse change in demand.
B)The availability of building materials influences demand.
C)Consumer preferences influence demand.
D)Demand is the desire and ability to purchase or lease goods and services

Answer 20

B) THE AVAILABILITY OF BUILDING MATERIALS INFLUENCES DEMAND. The availability of building materials has to do with supply (not demand).

Question 21

When the equilibrium of the real estate market is upset by excess demand
A)a buyer’s market exists.
B)builder activity decreases in response to need.
C)a seller’s market exists.
D)demand decreases.

Answer 21

C) A SELLER’S MARKET EXISTS

Question 22

Which statement does NOT describe the real estate market?
A)Real estate has become standardized thanks to technology.
B)Land is permanent.
C)Real estate is fixed in its location.
D)Federal monetary policy has an indirect influence on the real estate market.

Answer 22

A)Real estate has become standardized thanks to technology.

Question 23

The ultimate decision makers in the marketplace are
 A)salespersons.
 B)manufacturers.
 C)producers.
 D)consumers.

Answer 23

D)consumers.

Question 24

The barometer of the real estate market is considered to be the
 A)change in consumer tastes.
 B)number of housing starts.
 C)cost and availability of credit.
 D)change in consumer income.

Answer 24

C)cost and availability of credit.

Question 25

One person or a group of persons occupying a separate housing space is technically defined as a

Answer 25

Household

Question 26

Which statement is FALSE regarding the relationship between price and demand?
A)There is an inverse relationship between price and demand.
B)An increase in price causes an increase in demand.
C)Decrease in price causes an increase in demand.
D)An increase in price causes a decrease in demand.

Answer 26

B)An increase in price causes an increase in demand.

Question 27

The MOST important cause of population increase in Florida has been the

Answer 27

IN-MIGRATION OF NEW RESIDENTS

Question 28

The company who do the producing is the

Answer 28

most efficient producer of a comparable quality product