Level 20 Economics Quiz: Key Concepts and Definitions Flashcards

Level 20 Economics Quiz: Key Concepts and Definitions Flashcards

How many buyers and sellers are in a broad market?many buyers and few sellersmany buyers and sellersmany sellers and few buyersfew buyers or sellers

many buyers and sellersnote: Broad markets mean lots of

buyers and lots of sellers.

Supply and price move in:the same directionopposite

directions

opposite directionsnote: Supply and price move in opposite

directions.Which of these could be a factor in creating a seller's market?low housing supplylow demandfew qualified buyerstoo much inventory on the market

low housing supplynote: Low housing supply creates a

seller's market.What is one of the most important differences between an appraisal and a CMA?An appraisal is used to price a new property. A CMA is used to price a resold property.An appraisal is for commercial property. A CMA is for residential property.An appraisal must be done by a licensed appraiser. A CMA can be done by anyone.An appraisal affects a seller's title. A CMA does not.An appraisal must be done by a licensed appraiser. A CMA

can be done by anyone.note: An appraisal must be done

by a licensed appraiser, while a CMA can be done by anyone.When Disney World® was built, the farmlands that surrounded the theme park suddenly appreciated in value.This BEST describes an example of the economic power

of:illiquiditymodificationscarcityfixity

modificationnote: This is an example of modification.

Modification refers to the fact that the value of land can be affected by human-made changes to the land.What term identifies an economic preference for a certain location?fixitydurabilitysitusuniqueness

situsnote: Situs is an economic (not geographic) preference

for a particular location.What is the difference between assemblage and plottage?Assemblage is combining lots. Plottage is the resulting increase in value.Assemblage is combining residential lots. Plottage is combining commercial lots.Assemblage is done by a real estate agent. Plottage is done by a developer or subdivider.Assemblage requires the approval of the zoning board. Plottage does not.Assemblage is combining lots. Plottage is the resulting

increase in value.note: Assemblage is combining plots.

Plottage is the resulting increase in value.Which value is given to a property by the local tax authority for tax purposes?market valueassessed valueappraised valueAll choices are correct.

assessed valuenote: The assessed value is the value given

to a property by the local tax authority for tax purposes.Which one of these is an appraisal?A licensed appraiser assigns a value to a home.A real estate agent assigns a value to a home.A buyer decides how much they are willing to pay for a home.A tax assessor assigns a value to a home.

A licensed appraiser assigns a value to a home.note: An

appraisal MUST be done by a licensed appraiser.Two super fancy homes have been built on Frank's block recently. Because they sold for so much money, the value of his home has increased as well. Which economic principle does this illustrate?the principle of regressionthe principle of conformitythe principle of competitionthe

principle of progression

the principle of progressionnote: This illustrates the

principle of progression: If a subject property is located

among properties that have a higher value, that can bump up the subject property's value.

Jane buys a home with an extra bedroom and bathroom that she's planning to rent out. She pays a little more for a property with a separate entrance for the rental space, knowing she will make the money back on the rent. What principle of value is at work here?principle of anticipationprinciple of substitutionprinciple of conformityprinciple of contribution

principle of anticipationnote: The principle of anticipation

states that the present value of a property is affected by the anticipated income or utility. Jane pays a little extra because she anticipates she'll make it back by renting out part of her home.When supply decreases and demand increases in a market, what happens to price?It goes down.It goes up.It stays the same.Price is not affected by supply and demand.

It goes up.note: When supply decreases and demand

increases, prices go up.Increases in the cost of financing, cost of construction, and land values can cause the price of real estate

to:decreasebecome stagnantincreasedeflate

increasenote: When the cost of financing, construction, or

land values increases, the price of real estate also increases.

The principle of contribution states:The present value of a

property is affected by the anticipated income or utility that property will give its property owner.The value of something is affected by the cost of getting a similar item elsewhere.A property's overall value is made up of the combined value of each of its parts.The value of something is determined by adding the assessed and previous market values to find the average of the new value.A property's overall value is made up of the combined

value of each of its parts.note: The principal of contribution

states that a property's overall value is made up of the combined value of each of its parts.Which of the following would motivate builders to build new houses right away?low prices of real estatehigh cost of constructionexpectation of recessionlow prices of raw land

low prices of raw landnote: A decrease in the cost of

construction and price of raw land would motivate builders to build new houses right away.Which of the following affects the price of real estate?demand for propertysupply of moneyunemploymentAll choices are correct.

All choices are correct.note: The price of real estate is

affected by the supply and demand for real estate. Demand for real estate is affected by many things, including the supply of available loan money, unemployment, confidence in the economy, etc.An exciting new development is being created, but the developer is only putting three lots up for sale (and keeping the rest). Many buyers in town want to be the one to own one of these three lots. Which two characteristics of value does this demonstrate?utility and transferabilityscarcity and transferabilitydemand and utilitydemand and scarcity

demand and scarcitynote: The lots are scarce, and

therefore in high demand.