Chapter 2

Question 1

one of a wide range of assets available for inclusion in investors’ portfolios.

Answer 1

Real estate

Question 2

The _____ the price at which an asset can be acquired relative to price of competing assets of same income and risk category, the greater the relative yield on asset in question

Answer 2

lower

Question 3

The lower the price at which an asset can be acquired relative to price of competing assets of same income and risk category, the ______ the relative yield on asset in question

Answer 3

greater

Question 4

________ will be relatively more desirable, other things being equal

Answer 4

lower-priced asset

Question 5

lower-priced asset will be relatively more desirable, other things being equal: translated into traditional supply and demand language this means…

Answer 5

the lower the price, the greater the quantity of an asset or service buyers stand ready to take off market.

Question 6

For a given level of demand for real estate (that is, at existing rent levels), each real estate investor develops a…

Answer 6

perception of appropriate prices for real estate assets

Question 7

For a given level of demand for real estate (that is, at existing rent levels), each real estate investor develops a perception of appropriate prices for real estate assets: When market prices are below this perceived value, _______.
Conversely, ________

Answer 7

• they will be inclined to add to their portfolios.

- they will be inclined to sell when market prices move above the perceived value.

Question 8

while the supply of space available for rent is relatively _____ over the short term, the supply of property interests is ___________

Answer 8

• fixed

- highly responsive to price even over the short term

Question 9

_____ are institutional arrangements or mechanisms that bring buyers and sellers into contact

Answer 9

Markets

Question 10

Markets are often defined in terms of ________, such as the residential real estate market or the market for industrial buildings

Answer 10

commonality of product

Question 11

Markets: They are also frequently defined in ______. In this respect, neighborhood is a term sometimes used to describe an area in which specific phenomena have a direct and immediate influence on all real estate.

Answer 11

geographic terms

Question 12

______ are difficult to define, because submarkets tend to overlap.

Answer 12

Market boundaries

Question 13

Market boundaries are difficult to define, because ______

Answer 13

submarkets tend to overlap.

Question 14

Economists classify market structures according to the extent to which…

Answer 14

individual buyers and sellers can influence prices and according to the degree to which relevant market information is readily reflected in prices.

Question 15

Markets in which there is only one supplier of a good or service

Answer 15

monopolies

Question 16

markets having so many participants that no one person or firm has any discernible impact on price

Answer 16

atomistic

Question 17

Most markets fall between these extremes: ______ and ______

Answer 17

monopolies, atomistic

Question 18

In ________ all relevant information is quickly reflected in market prices

Answer 18

efficient markets

Question 19

Participants in ______ can benefit by searching for the best available price

Answer 19

less efficient markets

Question 20

Because information in ______ is scarce and expensive, participants with monopolistic access to information may be able to consistently outperform the market

Answer 20

inefficient markets,