CMGT 3500- Final Exam pt.1 end of
chapter Exam Questions and Answers
(Latest 2026)
List several measures that describe the size of the
construction industry - Correct Answers ✅- accounts for
2/3 of $1-trillion in expenditures per year in new construction
- constitutes about 5% of GDP
-6% (7.5 mill) of workers of the industrial workforce is
employed directly in the construction industry
-the construction industry represents the largest single
production activity in the American economy
Under what conditions might the funding of public
construction projects be particularly high? - Correct
Answers ✅periods of recession
why is the construction industry referred to as an easy entry
and easy exit industry? - Correct Answers ✅high growth
rate in construction
low capital requirements
little absolute cots or profit advantage for established firms
,CMGT 3500- Final Exam pt.1 end of
chapter Exam Questions and Answers
(Latest 2026)
most states have no rigid licensing requirements or fees
What are the ramifications of the cyclic tendencies
experienced in the construction industry? - Correct Answers
✅some firms exit the industry without the benefit of choice,
they fail.
periods of recession, weak local economy , competition
increases, causing profit margins to decrease which results in
failure of construction companies
Contrast the financing of public versus private construction
projects? - Correct Answers ✅private:
funded through:
-expenditure of existing capital
-direct loans from outside creditors
-sale of fixed assets
-issuance of additional shares of stock/corporate bonds
-endowments
public:
funded through:
-appropriations from annual operating budgets (general
taxation)
, CMGT 3500- Final Exam pt.1 end of
chapter Exam Questions and Answers
(Latest 2026)
-special taxation assessments for specific purposes
-bond issues for specific purposes
-endowments
What are some advantages and disadvantages of the general
contract approach? (design-bid-build) - Correct Answers
✅Advantages:
-gives the owner a firm idea of the final costs of the project
-GC has skills that should reduce cost to owner
-GC maintains a staff of trained supervisors
-clearly defined roles for each contracting party
disadvantages:
-often extends project duration
-owner does not have an agent involved in contractual
arrangements
-leads to tight bids and small profit margins
-exposes owner a greater probability to claims
Discuss the criticisms that have been made of public
agencies performing construction services by the self-
performance or force account method - Correct Answers
✅-instances in which the public owner submitted a bid on
competitively bid projects, owner is frequently the low bidder
chapter Exam Questions and Answers
(Latest 2026)
List several measures that describe the size of the
construction industry - Correct Answers ✅- accounts for
2/3 of $1-trillion in expenditures per year in new construction
- constitutes about 5% of GDP
-6% (7.5 mill) of workers of the industrial workforce is
employed directly in the construction industry
-the construction industry represents the largest single
production activity in the American economy
Under what conditions might the funding of public
construction projects be particularly high? - Correct
Answers ✅periods of recession
why is the construction industry referred to as an easy entry
and easy exit industry? - Correct Answers ✅high growth
rate in construction
low capital requirements
little absolute cots or profit advantage for established firms
,CMGT 3500- Final Exam pt.1 end of
chapter Exam Questions and Answers
(Latest 2026)
most states have no rigid licensing requirements or fees
What are the ramifications of the cyclic tendencies
experienced in the construction industry? - Correct Answers
✅some firms exit the industry without the benefit of choice,
they fail.
periods of recession, weak local economy , competition
increases, causing profit margins to decrease which results in
failure of construction companies
Contrast the financing of public versus private construction
projects? - Correct Answers ✅private:
funded through:
-expenditure of existing capital
-direct loans from outside creditors
-sale of fixed assets
-issuance of additional shares of stock/corporate bonds
-endowments
public:
funded through:
-appropriations from annual operating budgets (general
taxation)
, CMGT 3500- Final Exam pt.1 end of
chapter Exam Questions and Answers
(Latest 2026)
-special taxation assessments for specific purposes
-bond issues for specific purposes
-endowments
What are some advantages and disadvantages of the general
contract approach? (design-bid-build) - Correct Answers
✅Advantages:
-gives the owner a firm idea of the final costs of the project
-GC has skills that should reduce cost to owner
-GC maintains a staff of trained supervisors
-clearly defined roles for each contracting party
disadvantages:
-often extends project duration
-owner does not have an agent involved in contractual
arrangements
-leads to tight bids and small profit margins
-exposes owner a greater probability to claims
Discuss the criticisms that have been made of public
agencies performing construction services by the self-
performance or force account method - Correct Answers
✅-instances in which the public owner submitted a bid on
competitively bid projects, owner is frequently the low bidder
