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FIN 351 Quiz 3 (Ch. 4+5)
Terms in this set (20)
A city's potential for growth or its susceptibility to decline is determined by a set of economic activities that the city provides for the world beyond its boundaries. Economists refer to this set of activities as a city's
A new faculty member at the local university pays $1,500 per month to rent an apartment in the downtown area. She teaches on campus three days a week and works from home the remaining two days. On the days when she must commute, given the heavy traffic congestion, it takes her two hours each way to commute from downtown to campus. According to the assumptions of the bid-rent model, what should this professor be willing to pay in rent per month to live near campus if her hourly wage rate is $25? (In your calculations, assume there are four weeks in a given month.)
According to the bid-rent model, which of the following individuals would be the one most likely to live closest to the central business district (CBD)? (Hint: Assume that work locations are located adjacent to each other at the center of the CBD.)
a doctor at the city hospital who must walk to work
According to the bid-rent model, which of the following individuals would be the one least likely to live closest to the central business district (CBD)? (Hint: Assume that work locations are adjacent to each other at the center of the CBD.)
a barista at the local coffee shop who uses a car to commute
An individual works downtown and pays $600 per month in rent for an apartment located 10 miles from her office. She has calculated that she spends 30 minutes per day driving each way to the office and it costs her $4 per day in gas and lost productivity. Using the framework of the bid-rent model, how much would she be willing to pay for an apartment downtown, assuming a 20 workday month?
Cities such as New York are able to host a variety of complex industries because of the development of specialized resources that support their growth. When specialized resources emerge in response to demand from multiple industries, this is referred to as
Eminent domain is the right of government to acquire private land, without the owner's consent, for public use, with due process and just compensation. The legal procedure for exercising the right of eminent domain is referred to as
Given the following information, calculate the total annual tax liability of the homeowner: market value of property: $350,000; assessed value of property: 40% of the market value; exemptions: $2,000; millage rate: 33.95 mills.
Given the following information, compute the property tax rate for the community in percentage terms. Total budget expenditures: $108 million; total nonproperty tax income: $50 million; total assessed value of all properties: $2 billion; total exemptions: $550 million.
Most communities contain a number of tax-exempt properties. All of the following are typically included in the tax-exempt property classification except
Real estate taxes represent the largest single source of revenue for a large portion of local governments. Most property taxes are applied in relation to the value of the property, or in other words, they are
ad valorem taxes
Special assessments are levied to pay for specific improvements that benefit a particular group of properties. All of the following characteristics of special assessments are true except
They are considered ad valorem taxes
Tax rates are usually stated in mills. Assuming the tax rate in percentage terms is 6.5%, convert this rate to mills.
The growth of the motion picture industry in Los Angeles, the petrochemical industry in Houston, and the software industry in Silicon Valley are all examples of how the growth of an industry within a city can create cost advantages for future growth. Economists refer to this phenomenon as
industry economies of scale
The right of government to acquire private property, without the owner's consent, for public use in exchange for just compensation is referred to as
Understanding the revenue-generating ability of the core export activities of a local area has important implications on the market value of real estate. When the income that these activities generate is respect within the community on other local goods and services, the community is benefiting through a
Using the following information, determine the location quotient for Motor City: employment in motor vehicle manufacturing within Motor City: 12,643; total employment in Motor City: 560,379; employment in motor vehicle manufacturing (nationally): 152,750; total employment (nationally): 106,201,232.
Using the following information, determine the location quotient for this industry: percentage of employment in financial services industry within the local community: 15%; percentage of employment in financial services industry for the entire United States: 4.4%.
When land use controls impose exceptional hardship and loss of value, a relief mechanism must be provided. This relief is referred to as a
Which of the following tools of public land use control represents the earliest method of police power to regulate land use? (Hint: Standards for energy efficiency and sustainability are the most recent trends in the application of this land use control.)
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