REAL 4000 Test 2 (UGA Martin)
Questions and Answers
two real estate markets
✓ ~~~ the market for land and the market for space
the market for land
✓ ~~~ the market where those who supply space compete with each other for locations
the market for space
✓ ~~~ the market where property owners compete with each other for users of space
submarkets
✓ ~~~ single, multifamily, office, retail, industrial, hospitality
demand
✓ ~~~ the value of urban land is almost completely determined by _____?
fixed
✓ ~~~ supply is essentially
location
✓ ~~~ what determines the demand for a particular piece of land?
access
, ✓ ~~~ demand for a location is primarily a demand for _____?
pay the most
✓ ~~~ developers compete for land with the best offers access to a large population and
the developer that wins ________
who is willing to pay the most?
✓ ~~~ the one whose users place the highest value on the site, and the one with the ability
to offset the high cost of the land
offset the high cost of land
✓ ~~~ use less of it by building upwards
Factor substitution
✓ ~~~ substitute building materials for land
competitive advantage of building upwards
✓ ~~~ office building, apartments, hotels can but factories and warehouses cant
vertical space
✓ ~~~ occupies most costly sites, most dense development, they become more desirable
because more people live there
city
✓ ~~~ a location where the density of economic activity is significantly greater than it is in
the surrounding area
industry economies of scale
, ✓ ~~~ average production cost falls as quantity supplied increases.
small firms
✓ ~~~ large firms are better than
optimal industry structure
✓ ~~~ involves fewer larger firms rather than many small firms
agglomeration economies
✓ ~~~ individual firm becomes more efficient when it is located close to other firms
(localization or urbanization)
localization economies
✓ ~~~ Individual firm becomes more efficient as the size of the local industry increases.
Industry clusters
urbanization economies
✓ ~~~ individual firm becomes more efficient as the size of the city that is located in
increases. firms are more efficient in larger cities than in smaller ones
causes of localization economies
✓ ~~~ lower input prices, support of specialized services, more effect labor market
matching, learning and innovation
lower input prices
✓ ~~~ large local industry presence input suppliers to locate nearby. lower transport costs
lead to lower input prices
support of specialized services
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