PRII Ch 20

Price is best described as (20)

• what suppliers charge for goods and services.
• the amount of money consumers are willing to pay for a product or service.
• the amount of money a buyer and seller agree to exchange to complete a transaction.
• a control placed on prices by the federal government.

Four principal determinants of value underlying the price for a product are (20)

• durability, quality, scarcity, and materials.
• desire, utility, scarcity, and purchasing power.
• popularity, utility, quality, and discount.
• desire, costs, convenience, and time.

A town has a rapidly growing population, but there are no longer any vacant lots around the lake to build more houses. In this case, it is likely that the price of existing homes on the lake (20)

• will stabilize, since the population must stabilize.
• will increase.
• will decline, since no further building can take place.
• will not show any predictable movement.

If there is a significant undersupply of homes in a market, construction will tend to increase. This is an (20) example of

• supply outstripping demand.
• overpricing products.
• the price mechanism
• the market tending toward equilibrium.

If commercial real estate rental prices are falling in a market, it is likely that

• demand has outstripped supply of space.
• the market is in equilibrium.
• the market is over-supplied.
• employment is increasing.

Which of the following is an important economic characteristic of real estate? 20

• The demand must literally come to the supply.
• Real estate is a highly liquid product.
• The product is quick to adapt to market changes.
• The market is centralized.

The foremost factor contributing to commercial and residential demand in a market is

• marketing.
• base employment
• existing supply of properties.
• household income.

A construction boom in a market is an indication that prices

• have been increasing.
• have been declining.
• have been in equilibrium.
• have exceeded supply.

A local government could stimulate the real estate market by

• increasing labor costs and curbing the money supply.
• increasing taxes and interest rates.
• declaring a moratorium on construction.
• expanding the sewer system.

Two important concerns of retail property users are

• trade area population and spending patterns.
• quality of life and dwelling amenities.
• costs of occupancy and building efficiency.
• environmental regulations and access by suppliers.