REE3043 WOODYARD EXAM 1 QUESTIONS AND ANSWERS

REE3043 WOODYARD EXAM 1 QUESTIONS AND ANSWERS
Economists suggest that the value of something results from its utility and: - CORRECT
ANSWER✅✅✅Scarcity



The value of something depends on its utility and 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: - CORRECT ANSWER✅✅✅Urban
Economics



Urban economics extends the basic ideas of early economists to better explain how space is used.



Formal arrangements and associations that members of society make to support fundamental economic
and social activities are referred to, in the text, as: - CORRECT ANSWER✅✅✅Institutions



Marshall contended that in a perfect market, the value of a good - CORRECT ANSWER✅✅✅Was
equal to its price



Commercial mortgages held in the portfolios of lenders are generally referred to as: - CORRECT
ANSWER✅✅✅Unsecuritized commercial mortgages



Stocks, bonds, and cash are generally classified as: - CORRECT ANSWER✅✅✅Financial Assets



Real estate in the United States represents approximately what portion of the world's wealth? -
CORRECT ANSWER✅✅✅15%



Approximately ______________ of the wealth of real estate in the U.S. accrues to residential property. -
CORRECT 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.? - CORRECT ANSWER✅✅✅15%

,The text organized to describe the following five perspectives of real estate: - CORRECT
ANSWER✅✅✅~IMVML~

Investment

Market

Valuation

Mortgage finance

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. - CORRECT 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). - CORRECT ANSWER✅✅✅TRUE



T/F: Urban economics constitutes a branch of economics that focuses on urban problems, especially
housing issues. - CORRECT ANSWER✅✅✅TRUE



T/F The fundamentals of supply and demand explain all aspects about individual and market behavior in
valuing space. - CORRECT 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. - CORRECT ANSWER✅✅✅TRUE



T/F: Real estate can be classified as both a financial asset and a real asset. - CORRECT
ANSWER✅✅✅TRUE

, T/F: Consistent with an open economy, most of the land in every state in the U.S. is privately owned. -
CORRECT 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 world's wealth. - CORRECT
ANSWER✅✅✅TRUE



T/F: Commercial real estate constitutes the most valuable component of the U.S. real estate market. -
CORRECT ANSWER✅✅✅FALSE



Homeowners and residential mortgage lenders jointly own the 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. - CORRECT ANSWER✅✅✅FALSE



Residential mortgages = 44.1% of total residential real estate.



Commercial mortgages = 24.6% of total commercial real estate.



Financial Asset - CORRECT ANSWER✅✅✅Claims to the incomes generated from the use of real
assets



Real Asset - CORRECT ANSWER✅✅✅Tangible things that have value because they are useful



Real Estate - CORRECT ANSWER✅✅✅the collection of rights associated with real actions involving
land



Real property - CORRECT ANSWER✅✅✅term used as a synonym for real estate, often mentioned to
describe legal rights in land