Economists suggest that the value of something results from its utility and: - answer✔✔Scarcity
A branch of economics that extends the basic ideas of the early classical and neoclassical
economists to better understand and predict how humans use space is termed: - answer✔✔Urban
economics
Formals arrangements and associations that members of society make to support fundamental
economics and social activities are referred to, in the text as - answer✔✔institutions
Marshal contended that in a perfect market, the value of a good - answer✔✔Was equal to its
price
Commercial mortgages held in portfolios of lenders are generally referred to as -
answer✔✔Unsecuritized commercial mortgages
Stocks,bonds, and cash are generally classified as - answer✔✔Financial assets
Real estate in the United States represents approximately what portion of the world's wealth? -
answer✔✔15 %
Approximately __________ of the wealth of real estate in the U.S Accrues to residential
property - answer✔✔75%
According to the text, business real estate (excluding farmland) accounts for approximately
_____ percent of the total value of real estate in the U.S? - answer✔✔15%
The text organized to describe the following five perspectives of real estate - answer✔✔-
investment, market, valuation, mortgage finance, and legal
T/F: Early economists concluded that land, labor, and credit were the resources of society that
were combined by entrepreneurs to form useful products - answer✔✔FALSE
The resources combined to form useful products in society are land, labor, and capital.
T/F: Alfred Marshall, an economist, argued that value results from the intersection of supply
(cost) and demand (utility). - answer✔✔True
T/F: Urban economics constitutes a branch of economics that focuses on urban problems,
especially housing issues. - answer✔✔True
T/F The fundamentals of supply and demand explain all aspects about individual and market
behavior in valuing space. - answer✔✔FALSE
Much behavior is still unexplained due to the role of institutional arrangements, such as laws/
regulations.
T/F: In addition to affecting market operations, lease contracts serve to formally identify a
property's rent and the intersection of supply and demand - answer✔✔True
T/F: Real estate can be classified as both a financial asset and a real asset - answer✔✔True
T/F: Consistent with an open economy, most of the land in every state in the U.S. is privately
owned. - answer✔✔FALSE
There are a few U.S. States that most of the land is owned by the government (Ex. Alaska)
T/F: According to the text, real estate represents about one-half of the worlds wealth -
answer✔✔True
T/F: Commercial real estate constitutes the most valuable component of the U.S real estate
market - answer✔✔False. Homeowners and residential mortgage lenders jointly own majority of
U.S Real Estate
T/F Commercial real estate owners carry more debt (as a percentage of the total property value)
than residential property owners. - answer✔✔false
Effective Cost - answer✔✔the true borrowing cost, including the effect of up-front financing
costs
Capitalization Rate - answer✔✔calculated as expected cash flow in year one divided by the
initial acquisition price, it is a measure of the current relationship between a property's income
stream and price
internal rate or return - answer✔✔The discount rate which equates the present value of the cash
inflows to the present value of the cash outflows
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