A property owner constructs a six-car garage at a cost of $80,000. It only adds $40,000 in value to the property. What economic principle does this best
... [Show More] demonstrate? CORRECT ANSWERS: Contribution
What are the four agents of production? CORRECT ANSWERS: land, labor, capital, coordination
The principle of contribution is most closely associated with: CORRECT ANSWERS: the Sales Comparison Approach (The contributory value of a given amenity is the public's perception of its actual contribution to value when considering the overall value of the property as a whole)
When supply is higher than demand, the value of a product: CORRECT ANSWERS: declines
Finish the sentence: Profit encourages ___________. CORRECT ANSWERS: competition
What is another name for the principle of inclining and declining periods? CORRECT ANSWERS: Integration and Disintegration
An appraiser must value the land and the improvements based on the same use. Which economic principle or theory does this demonstrate? CORRECT ANSWERS: Consistent Use (The Consistent Use Theory holds that the land and the buildings must all be valued considering the same highest and best use of the property. The appraiser cannot value the land under one use and the improvements under another use)
When analyzing the life cycle for a neighborhood, which stage is characterized by equilibrium of supply and demand? CORRECT ANSWERS: Stability
The principle of surplus productivity is associated with which approach to value? CORRECT ANSWERS: Income Approach
What does USPAP say about market value? CORRECT ANSWERS: appraisers are cautioned to identify the exact definition of market value and its authority
What type of value recognizes the cost to replace the improvements but does not include the land value? CORRECT ANSWERS: insurance value
The amount of money that a financial institution is willing to lend the borrower on a particular property is the: CORRECT ANSWERS: loan value
Which statement is TRUE about property purchase loans and down payments? CORRECT ANSWERS: The greater the down payment, the less chance the borrower will default. [Show Less]