PRACTICE TEST – REAL ESTATE ECONOMICS

By: Augusto B. Agosto, EnP, REA, REB

Faculty, University of San Carlos
www.appraisalcebu.wordpress.com

1. Economic Utility refers to the capacity to satisfy wants, production by labor and their:
a. Exchangeability b. Transferability
c. Uniqueness d. Scarcity

2. Market area cycles include

a. Growth, level of appreciation, and decline
b. Growth, stability, decline and revitalization
c. Growth, stability, decline and gentrification
d. Growth, stability, appreciation, and decline

3. The Gross Income Multiplier is a factor derived from comparable properties and applied to expected
rental income to estimate
a. value b. a gross income
c. a established cost d. A known price

4. Refers to the act of buying an under priced property and then quickly reselling it at market value:
a. Flipping b. Bird dogging
c. Fast break d. Brokering

5. A person who gets paid a referral fee for finding good deals for investors is known as:
a. Flipper b. Bird dog
c. Dealer d. Broker

6. These refer to the changes that result when wealthier people acquire or rent property in low
income and working class communities.
a. Progression b. Gentrification
c. Regression d. Competition

7. This is a market condition where there are more properties for sell than buyers.
a. Seller’s Market b. Buyer’s Market
c. Open Market d. Property Market

8. This is a market condition where there are more buyers than properties for sale.
a. Open Market b. Property Market
c. Seller’s Market d. Buyer’s Market

9. Turn-key loan is a type of loan wherein the tender has some complete control over the project
and the income from a certain period, part or all of which is assigned to him to
a. Amortize the loan b. amortize the project
c. amortize the turn-key Loan d. Amortize the construction Loan

10. Many seller and buyers; price is at its lowest.

a. Perfect Market b. Imperfect Market
c. Monopoly d. Monopsomy

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11. Few sellers, more buyers (sellers market) ; few buyers, more sellers (buyers market); price goes up
and down accordingly.
a. Perfect Market b. Imperfect Market
c. Monopoly d. Monopsomy

12. Single seller, multiple buyers

a. a. Perfect Market b. Imperfect Market
b. c. Monopoly d. Monopsomy

13. Single buyer, multiple sellers

a. a. Perfect Market b. Imperfect Market
b. c. Monopoly d. Monopsomy

14. Few seller, multiple buyers

a. Oligopoly b. Oligopsony
c. Monopoly d. Monopsomy

15. Few buyers, multiple sellers.

a. Oligopoly b. Oligopsony
c. Monopoly d. Monopsomy

16. A Real Investment Trust company shall distribute annually at least how much dividends to its
shareholders:
a. 90% b. 40%
c. 50% d. 75%

17. The following are determinants of value, except:

a. Demand b. scarcity
c. Transferability d. cost

18. An abstract sphere within which price-influencing factors tend to operate and wherein the payment of
the consideration is accompanied by transfer of right rather than by movement of goods is referred to
as:
a. Real Estate Investment b. Real Estate Development
c. Real Estate Market d. Real Estate Marketing

19. The following are functions of the real estate market, except:
a. influences the use of land b. regulates the supply of space
c. sets the timing of land development d. enhances supply and demand

20. The following are limitations of market indicators, except

a. Price b. Location
c. Classification d. Consummated sales

21. A real estate company that offers common shares to the public which is similar to any other stock that
represents ownership in an operating business:
a. Real Estate Development Corporation b. Real Estate Investment Trust
c. Real Estate Investment Company d. Real Estate Development Trust

22. The desirability of the economic utility of the property is known as:
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 a. Economic Utility b. Economic Life
c. Economic Value d. Economic Obsolescence

23. This refers to the statistical study of human population.

a. demographics b. demography
c. geography d. statistics

24. Characteristics of human populations as defined by population size and density of regions, population
growth rates, migration, vital statistics, and their effect on socio-economic conditions.
a. demographics b. demography
c. geography d. statistics

25. The theory that each incremental item becomes less expensive as the volume is
increased is called:
a. Efficiency b. Economies of scale
c. Profit d. Marginal

26. All of the following are characteristics of a real estate market except:
a. Land is indestructible b. Land is immobile
c. The market rapidly adjusts to changes in supply and demand
d. Government controls play an important role when compared to other markets.

27. A type of economy where the purchasing power of the consumers decides and drives the economy
(law of supply and demand).
a. Capitalism b. Socialism
c. Mixed Capitalism d. Mixed Socialism

28. A type of economy where the government decides and drives the economy, focuses on what is
needed rather than what is wanted.
a. Capitalism b. Socialism
c. Mixed Capitalism d. Mixed Socialism

29. A type of economy where the private sector and government perform equal roles in economic
decision-making; competition with regulation.
a. Capitalism b. Socialism
c. Mixed Capitalism d. Mixed Socialism

30. The application of economic techniques to real estate markets which tries to describe, explain, and
predict patterns of prices, supply, and demand is called:
a. Economics b. Real Estate Economics
c. Economics & Finance d. Real Estate Finance

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 ANSWER KEY

1A 11 B 21 B
2B 12 C 22 B
3A 13 D 23 B
4A 14 A 24 A
5B 15 B 25 B
6D 16 A 26 B
7B 17 D 27 A
8C 18 C 28 B
9B 19 B 29 C
10 A 20 D 30 B

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