Chapter 11 questions

Which principle recognizes that real estate markets are constantly changing?

• Anticipation

• Change

• Supply and Demand

• Competition

What principle suggests that value is influenced by the expectation of future benefits?

• Change

• Anticipation

• Supply and Demand

• Substitution

The point where supply and demand meet is called:

• Equilibrium

• Balance

• Conformity

• Competition

Which of the following is NOT a factor of production?

Effective demand refers to:

• The desire to buy

• The ability to pay

• Both a and b

• Neither a nor b

What happens to property values when supply increases relative to demand?

• Values increase

• Values decrease

• Values remain the same

• Values fluctuate unpredictably

Competition between sellers or landlords is driven by their desire to:

• Secure a sale or lease

• Increase supply

• Reduce demand

• Maximize externalities

The principle of substitution suggests that buyers will choose the property with:

• The highest price

• The lowest price

• The most amenities

• The fewest amenities

Opportunity cost is the cost of:

• Improving a property

• Maintaining a property

• Options not chosen

• External factors

Which principle focuses on the optimal combination of land and improvements?

• Substitution

• Balance

• Externalities

• Competition