section 15 Economics Vocabulary

Question 1

The quantity of a product or service available for sale, lease, or trade at any given time.

Answer 1

supply

Question 2

A quantity of a product or service that is desired for purchase, lease, or trade at any given time.

Answer 2

demand

Question 3

An interaction of supply and demand that determines a price a buyer and seller agree is the value of a good or service to be exchanged. A quantification of value in a transaction.

Answer 3

price

Question 4

In general, the worth of an item as determined by its utility, desirability, scarcity, affordability, and other components and quantified as price.

Answer 4

value

Question 5

Those expenses necessary to generate and deliver the item to the market. The essential production costs are the costs of capital, materials, and supplies; labor; management; and overhead.

Answer 5

cost

Question 6

1. Buyers and sellers exchanging goods and services through the price mechanism.
2. The totality of interactions between supply and demand for a specific set of products or services in a particular geographic area

Answer 6

market

Question 7

A theoretical market state in which the forces of supply and demand are in balance.

Answer 7

Market Equilibrium:

Question 8

The number of persons employed in the businesses that represent the economic foundation of the area. For example, the auto industry has traditionally been the primary base employer of the Detroit metropolitan area.

Answer 8

Base Employment:

Question 9

Total employment in a market includes base, secondary, and support industries. Total employment creates a demand for a labor force.

Answer 9

Total Employment:

Question 10

A measure of the unoccupied supply of exiting space in a building or market at any point in time. A vacancy rate is the amount of vacant space divided by the total amount of existing space.

Answer 10

vacancy

Question 11

The consumption of available vacant property in a building or market.

Answer 11

absorption

Question 12

Which of the following statements best describes the relationship between price and value in the market system?

Answer 12

Value is based on the interaction of underlying economic factors; price is a quantification of value in a transaction.

Question 13

If the price of an item is increasing, one can usually assume that

Answer 13

demand for the item is increasing in relation to supply of the item.

Question 14

Which of the following conditions would be true if the market for an item has achieved “market equilibrium?”

Answer 14

Supply and demand are equal, and price and value are equal.

Question 15

One of the economic characteristics that distinguishes real estate is

Answer 15

the uniqueness of every parcel.

Question 16

If demand is increasing, what would be the likely effect on real estate prices in an area where the municipality has declared a moratorium on new construction?

Answer 16

Prices would rise.

Question 17

If a new company that sells its products worldwide moves into a town and hires 100 employees, it would be reasonable to expect

Answer 17

an increase in demand for all types of real estate.

Question 18

What is “absorption?”

Answer 18

The number of available units that become occupied over a period of time.

Question 19

During a time of declining vacancy in a real estate market, one would expect

Answer 19

rising prices.

Question 20

Two important concerns of office property users are

Answer 20

costs of occupancy and building efficiency.

Question 21

Two important concerns of retail property users are

Answer 21

trade area population and spending patterns.