SM4700 Final Review
According to the competitive balance model of a large market team and a small market team, what happens to competitive balance when fan support for the small market team decreases?
Competitive balance decreases
According to the competitive balance model of a large market team and a small market team, what happens to competitive balance when fan support for the large market team decreases?
Competitive balance increases
According to the competitive balance model of a large market team and a small market team, what happens to competitive balance when gate revenue sharing is instituted?
Competitive balance remains the same
When a price ceiling is enforced in a market, what happens to consumer surplus and producer surplus in that market?
Consumer Surplus Increases, Producer Surplus Decreases
How would you expect the Atlanta Hawks moving to St. Louis to affect the price elasticity of demand for Atlanta Dream tickets?
Demand for Atlanta Dream tickets will become more inelastic.
How will the market for Atlanta Hawks season tickets be impacted by a decrease in the price of Atlanta Falcons season tickets?
Demand for Hawks tickets will decrease
How will the market for Atlanta Hawks tickets be impacted if there is an increase in fan income?
Demand for Hawks tickets will increase
The Law of Supply states that, holding everything else constant, when the price of a product increases, the quantity supplied of the product decreases.
False
The SEC employs a disproportionate revenue sharing system. True or False?
False
Other things equal, how would the price of Atlanta Hawks tickets be impacted if the stadium capacity was increased by 3,000 seats?
Price Decreases
Suppose the Atlanta Hawks increase stadium capacity by 3,000 seats. At the same time, there is an increase in fan income. What does our supply and demand model predict will happen to the price of Atlanta Hawks tickets?
Price is Indeterminant
What does Rottenberg's Invariance Principle imply about competitive balance and a competitive college football labor market (paying college football players)?
Rottenberg's Invariance Principle implies that instituting a 'pay for play' system would not have any impact on competitive balance in college football.
What is the driving force behind economics?
Scarcity
Suppose many fans begin to boycott MLB for some reason. How would this impact the salaries of MLB players in the long run?
The salaries of MLB players will fall.
If basketball replaces soccer as the most popular international sport, what would we expect to happen to the salaries of NBA players compared to the salaries of soccer players?
The salaries of NBA players will rise relative to the salaries of soccer players.
Which of the following choices correctly explains why professional athletes make much more money than teachers?
The supply of professional athletes is much smaller and more inelastic than the supply of teachers.
Why do individual sports tend to use a tournament theory structure when paying their athletes?
To encourage the athletes to exert additional effort
What is the profit-maximizing rule for a monopolist?
To produce a quantity such that marginal revenue equals marginal cost
A disproportionate revenue sharing scheme contributes to a decrease in competitive balance. True or False?
True
Some college football players and men's basketball players at major athletic universities are exploited. True or False?
True
True or False Producing at a point inside of the Production Possibilities Frontier represents an inefficient use of resources.
True
The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called
consumer surplus
A price ceiling creates a deadweight loss, but a price floor does not create a deadweight loss.
false
By adopting a Second-Degree Price Discrimination strategy, a firm extracts all consumer surplus out of the market.
false
In monopolistic competition, firms produce identical products.
false
Are workers exploited under perfect competition?
no
A price floor creates a surplus.
true
In the long run, economic profits are driven to zero under both perfect competition and monopolistic competition.
true
The Price Elasticity of Demand is always less than zero.
true
Vertical Integration can be beneficial to both the owner of a professional sports team as well as the fans of the team.
true