Economics of Sports Final
What is vertical equity?
A policy achieves vertical equity if it falls most heavily on those with the greatest ability to pay and places a small burden on those with low incomes.
What are public goods?
A public good is a commodity or service that the public can use without reducing its availability to others.
Eras of stadium construction7
Entrepreneurial period - owners built there own stadium, Civic infrastructure - cities bid on teams and paid for stadiums Public-Private Partnership - gov. paid 2/3 and teams paid the rest Corporations
How does free agency impact competitive balance?
Free agency has no effect on economic balance.
Which graph depicts the case in which society could benefit by supplying a subsidy to a monopoly (like a sports team), because of additional consumer surplus?
Graph A
What is horizontal equity?
Horizontal equity impacts everyone equally regardless of income.
What is tax increment financing?
Increased tax revenue to pay the city's debt to its bondholders instead of adding a new tax.
How do luxury taxes impact competitive balance?
Luxury taxes promote competitive balance.
Multiplier effect equation
Multiplier = 1/(1-MPC+MPI)
Who benefits from stadium subsidizing?
New stadiums increase attendance for a short period of time and prevent teams or corporations from paying for a stadium alone.
What does it mean for a public good to be non-excludable? Non-rival?
Non-excludable means that those who have not payed for the good aren't excluded from using it. Non-rival means that those who use the good don't limit others from using the good.
How does revenue sharing impact competitive balance?
Revenue sharing promotes competitive balance.
How does a reverse order draft impact competitive balance?
Reverse order drafts promote competitive balance
How do salary caps impact competitive balance?
Salary caps promote competitive balance.
What are user fees?
Taxes on goods such as tickets, parking or concessions.
What are sin taxes?
Taxes on products and services to discourage undesirable behavior like alcohol and tobacco.
What is tax incidence?
The division of the burden of a tax on consumers and producers
What are leakages?
When money leaves the local economy that it was spent in
If $200 is spent on a public project and the propensity to consume is 0.5, what will be the total economic impact? (Assuming there is no leakage.) a) $400 (b) $180 (c) $2000 (d) $20
a) $400
Which of the following is a positive externality caused by subsidies for the Columbus Crew? a) Restaurants in the arena district will increase hiring (b) Fans purchasing tickets will enjoy the game more. (c) Traffic in the arena district will be terrible. (d) All of the above
a) Restaurants in the arena district will increase hiring
If $100 is spent on a public project and the propensity to consume is 06 and a marginal propensity to import is 0.1, what will be the total economic impact? (Assuming there is no additional leakage) (a) $200 (b) $400 (c) $1000 (d) $190
(a) $200
Under which condition(s) could player salaries be positively effected by a salary cap? (a) A salary cap increases competitive balance, raising MR for all teams. (b) The salary cap is only binding on some teams. (c) The salary cap includes player maximums. (d) The salary cap increases total revenue for all teams.
(a) A salary cap increases competitive balance, raising MR for all teams.
Assume two firms are considering advertising. If neither firm advertises, they will eachearn $700. If one firm advertises and the other does not, then the advertising firm willearn $600 and firm not advertising earns $400. If both firms advertise, they each earn$450. What is the Nash Equilibrium? (a) Both firms advertise (b) One firm advertises (c) Neither firm advertises (d) None of the above
(a) Both firms advertise
What is tax incremented financing? (a) Cities pay for a project by earmarking future tax revenue (b) Taxes on parking, concessions, and other businesses that benefit from the project (c) Small tax increase on all goods to finance a project (d) A tax small enough to avoid any deadweight loss
(a) Cities pay for a project by earmarking future tax revenue
Which league type typically has more competitive balance? (a) Closed leagues (b) Open leagues
(a) Closed leagues
Which best describes the "all or nothing" demand curve in regards to hosting the Olympics? (a) Countries overpay for hosting kayaking so that they can also host women's gymnastics. (b) Countries must build huge, expensive campuses to field the games. (c) Countries that want to host the Olympics typically bid on the World Cup too. (d) All of the above.
(a) Countries overpay for hosting kayaking so that they can also host women's gymnastics.
Which is a positive externality of the Columbus Crew moving downtown? (a) Downtown restaurants will have increased business (b) The crew will be able to sell more tickets (c) Fans attending games will enjoy a more scenic stadium area (d) All of the above
(a) Downtown restaurants will have increased business
Which is true of elasticity when total revenue is maximized in a monopoly market? (a) E = 1 (b) E > 1 (c) E < 1 (d) The relationship varies based on costs
(a) E = 1
When a sports franchise is a monopoly and is maximizing revenue, which of the following is true of the price elasticity of demand? (a) Elasticity must be equal to one (b) Elasticity must be less than one (c) Elasticity must be greater than one (d) There is not enough information given
(a) Elasticity must be equal to one
Which best describes the uncertainty of outcome hypothesis? (a) Fans want to watch games with uncertain outcomes (b) Team owners cannot predict player performance (c) Players will chose to sign with the team that offers them the most money (d) All of the above
(a) Fans want to watch games with uncertain outcomes
Why would a rational franchise owner of an NFL team not lower ticket prices to fill a stadium? (a) Filling the stadium does not necessarily maximize revenue (b) The owner wants to move to a new city (c) The owner doesn't care about ticket sales, just wins (d) The competitive market has driven ticket prices to marginal cost
(a) Filling the stadium does not necessarily maximize revenue
Consider the supply and demand for Floyd Mayweather fights. Which describes the upward slope of the supply curve? (a) Floyd will fight in more fights if he gets paid more. (b) Floyd will fight more often as his technique and fitness improve. (c) Floyd will fight more often if more viable opponents are available. (d) All of the above
(a) Floyd will fight in more fights if he gets paid more.
Suppose the large market team in a league had to send a lump sum of $15 million peryear to the small market in their league. According to our two team fixed talent model,how would this affect competitive balance? (a) It wouldn't. (b) The small market teams would improve at the expense of the large market teams. (c) Both teams would improve winning percentages. (d) Both teams would lose more games.
(a) It wouldn't.
Which best describes specific training for an NFL quarterback? (a) Learning the play book of the team for which they currently play. (b) Lifting weights (c) Throwing Mechanics (d) All of the above
(a) Learning the play book of the team for which they currently play.
Which professional sports league was granted an exemption from anti-trust laws by congress? (a) MLB (b) NBA (c) PGA (d) NHL
(a) MLB *
Which best describes the Coase theorem in regards to MLB players? (a) MLB players under current contracts are traded to the teams for which they provide the most value. (b) MLB players are paid similar wages regardless of team. (c) MLB players wages increased drastically when free agency was first introduced. (d) Future MLB players are not well represented by the current union representatives.
(a) MLB players under current contracts are traded to the teams for which they provide the most value.
Which best describes the Rottenberg invariance principle? (a) MLB players under current contracts are traded to the teams for which they providethe most value. (b) MLB players are paid similar wages regardless of team. (c) MLB players wages increased drastically when free agency was first introduced. (d) Future MLB players are not well represented by the current union representatives.
(a) MLB players under current contracts are traded to the teams for which they providethe most value.
Given a demand curve P = 5000 - 50Q, what is the marginal revenue? (a) MR = 5000 -100Q (b) MR = 10,000 -50Q (c) $5000 (d) MR = 5000-50Q^2
(a) MR = 5000 -100Q
Which of the following are leakages in stadium projects funded by a city? (a) Many of the contractors for the stadium live outside the city. (b) Most of the contractors will purchase meals in the city. (c) Many of the concession stand workers will live in the city. (d) All of the above.
(a) Many of the contractors for the stadium live outside the city.
Which is true of marginal costs as a function of winning? (a) Marginal Costs are increasing (b) Marginal Costs are not a function of wins (c) Marginal Costs are typically a concave function (d) Marginal Costs are largely determined by stadium costs
(a) Marginal Costs are increasing
Which is true of marginal cost of a win in the NBA? (a) Marginal cost is increasing for teams that already have a lot of wins (b) Marginal cost is always decreasing (c) Marginal cost is constant (d) None of the above
(a) Marginal cost is increasing for teams that already have a lot of wins
Which is true of marginal revenue when total revenue is maximized? (a) Marginal revenue = 0 (b) Marginal Revenue is maximized (c) Marginal Revenue is positive (d) Marginal Revenue= Total Revenue
(a) Marginal revenue = 0
Which market type best describes an NFL franchise within its region? (a) Monopoly (b) Monopolistic Competition (c) Perfect Competition (d) Oligopoly
(a) Monopoly
What type of market does the NFL have in purchasing professional football labor? (a) Monopsony (b) Monopoly (c) Competitive (d) Competitive Monopoly
(a) Monopsony
Which best describes the current era of stadium construction in professional sports? (a) Most stadiums are partially subsidized and naming rights are sold to large corporations. (b) Most stadiums are built entirely with funds from the team owner and named after said owner. (c) Most stadiums are built entirely by municipalities and named after said municipality. (d) Most stadiums are built by federal stimulus money and named to honor political leaders.
(a) Most stadiums are partially subsidized and naming rights are sold to large corporations.
In which sports league are all broadcast rights sold nationally, by the league? (a) NFL (b) NBA (c) MLB (d) None of the above
(a) NFL
Which league structure is most likely to cause high variance in team revenue? (a) Open leagues (b) Single entity leagues (c) Closed leagues (d) None of the above
(a) Open leagues
Which is true of open leagues? (a) Open leagues typically have relegation and promotion. (b) Open Leagues tend to have more competitive balance. (c) Teams in open leagues hold more advantages than closed leagues when vying forsubsidies. (d) All of the above
(a) Open leagues typically have relegation and promotion.
Which of the following describes a user fee to fund a stadium? (a) Parking fees in the area of the stadium (b) Funding from future tax income generated by casinos (c) Sales tax in the city of the stadium (d) All of the above
(a) Parking fees in the area of the stadium
Which is a fixed cost in a season? (a) Stadium (b) Replacement Players (c) Stadium Repairs (d) All of the above
(a) Stadium
Which of the following constitutes price discrimination for OSU football tickets? (a) Student discounts (b) Higher prices for better seats (c) A higher price for the Michigan game (d) All of the above
(a) Student discounts
Which is true of the albor supply curve in professional sports? (a) Supply is very inelastic (b) Supply is very elastic (c) Supply is downward sloping (d) Supply is determined by sports franchises
(a) Supply is very inelastic
Which of the following is true of a tax used to fund a stadium? (a) Taxes on goods with inelastic demand will have a lower dead weight loss (b) To minimize deadweight loss (c) Sin taxes are typically vertically equitable (d) If the tax creates deadweight loss, then the project could never be justified
(a) Taxes on goods with inelastic demand will have a lower dead weight loss
Which describes a monopsony? (a) The NBA is the only U.S. league paying high salary players. (b) Notre Dame football is only shown on NBC. (c) The only MLS team that you can watch in Columbus is the Crew. (d) All of the Above.
(a) The NBA is the only U.S. league paying high salary players.
Which of the following would shift demand in a labor market for professional football? (a) The NFL creates a virtual fan experience similar to an actual game and fans are willing to pay full ticket price to attend virtually, thus increasing the value of the games (b) Players want to play more games if owners pay more (c) More international players are available (d) Players form a union
(a) The NFL creates a virtual fan experience similar to an actual game and fans are willing to pay full ticket price to attend virtually, thus increasing the value of the games
In a professional athlete labor market why is supply typically very inelastic? (a) There are typically very few people capable of playing at the professional level (b) Fans are willing to pay high prices for tickets (c) Teams put a high value on winning (d) The modern world-wide player pool gives teams a lot of options
(a) There are typically very few people capable of playing at the professional level
Mid-season the Columbus Crew decreased ticket prices and revenue was increased. Whatdoes that tell us about demand? (a) Tickets were originally priced above the demand curve. (b) Price elasticity was elastic. (c) The supply curve has shifted. (d) None of the above.
(a) Tickets were originally priced above the demand curve.
For a baseball player, which best describes VMPL? (a) WAR * value of a win (b) WAR (c) Years of service (d) Team quality
(a) WAR * value of a win
Which of the following aids NFL teams in their negotiations with cities to subsidize stadiums? (a) the fact that the league is closed. (b) start-up leagues like the AAF willing to move to cities. (c) competition from college football (d) All of the above
(a) the fact that the league is closed.
In a supply and demand graph for a labor market, which is true? (a)The demand curve is derived from the value of the marginal productivity of workers. (b)The supply curve is derived from wins produced by the players. (c)The demand curve shifts when more players enter the market. (d)All of the above.
(a)The demand curve is derived from the value of the marginal productivity of workers.
Suppose a player enters forced salary arbitration in MLB. The team enters a proposed contract of $5 million and the player enters $12 million. The arbitrator estimates the players value at $10 million. What will his salary be? (a) $10 million (b) $12 million (c) $7.5 million (d) $5 million
(b) $12 million
Suppose a city is considering a subsidy for a new stadium. The city plans to spend $100million. The marginal propensity to consume is 0.9 and the marginal propensity to import is 0.4. What is the expected total economic output caused by the subsidy? (a) $1 billion (b) $200 million (c) $111 million (d) $77 million
(b) $200 million
Suppose a player enters forced salary arbitration in MLB. The team enters a proposedcontract of $5.5 million and the player enters $7.5 million. The arbitrator estimates theplayers value at $6 million. What will his salary be? (a) $6 million (b) $5.5 million (c) $7 million (d) $4 million
(b) $5.5 million
If there is a marginal propensity to consume of 0.75, what is the spending multiplier? (a) 1/10 (b) 4 (c) 10 (d) 1.8
(b) 4
Which of the following indicates a high degree of competitive balance? (a) A high standard deviation of winning percentage (b) A gini coefficient of near zero for wins (c) Long streaks of never, ever winning a superbowl (d) None of the above
(b) A gini coefficient of near zero for wins
Which is true of the effect of new stadiums on competitive balance? (a) A new stadium will increase team performance if the new stadium is able to sell permanent ownership in luxury boxes. (b) A new stadium only affects competitive balance if marginal revenue is affected. (c) Research has shown that teams with new stadiums consistently perform better in the long run. (d) All of the above.
(b) A new stadium only affects competitive balance if marginal revenue is affected.
Which of the following best describes a natural monopoly? (a) A single firm buys out all their competitors. (b) A single firm can produce a better or cheaper product than many firms. (c) Increasing ATC make a single firm more efficient. (d) All of the above.
(b) A single firm can produce a better or cheaper product than many firms.
Which off the following would be a vertically equitable tax to pay for a stadium?* (a) A tax ion tickets that increases the higher up the seat is (b) A ticket tax with a higher rate for luxury boxes (c) An increase in bus fares near the stadium (d) Cigarette tax
(b) A ticket tax with a higher rate for luxury boxes
Which of the following can decrease the effect of a stadium project on the local economy? (a) An economy already at full employment (b) All of the given answers (c) Importing labor from outside of the area (d) Loss of revenue at other entertainment based businesses
(b) All of the given answers
Brazil did not fare well after hosting the Olympics and World Cup. How could the "winner's curse explain their over estimates of revenue? (a) corruption within Brazil ate away at profits (b) Brazil promised too much, because they overestimated revenue (c) The taxes necessary to build all of the facilities crowded out private spending (d) All of the above
(b) Brazil promised too much, because they overestimated revenue
Which is true of modern stadiums? (a) Most modern stadiums are combination stadiums developed for football and baseball (b) Cities are less inclined to pay the entire cost of the stadium (c) Most stadiums are named after the team owner (d) All of the above
(b) Cities are less inclined to pay the entire cost of the stadium
If the uncertainty of outcome hypothesis holds and a team wins several consecutive championships, how will attendance be affected? (a) Attendance will increase as the championship run increases (b) Eventually attendance will decrease (c) Attendance will remain constant
(b) Eventually attendance will decrease
Which is true of television money from the World Cup? (a) The host country owns the broadcast and therefore gets most of the TV money (b) FIFA keeps most of the TV money (c) The TV money is mostly split between teams that appear the most on TV and get the highest ratings (d) None of the above
(b) FIFA keeps most of the TV money
Which describes the uncertainty of outcome hypothesis? (a) Players fight for long term contracts, because performance is difficult to predict. (b) Fans have demand for games with unknown outcomes. (c) Owners cannot perfectly predict performance, therefore the correlation between salary and wins is low. (d) Anything can happen on a given day in major professional sports leagues.
(b) Fans have demand for games with unknown outcomes.
Suppose each NFL team is required to make a $30 million contribution to a fund that will settle concussion lawsuits. How will this affect competitive balance assuming our two team model is expandable to 32? (a) All teams will lose more games. (b) It won't. (c) Small market teams will be less competitive. (d) Large market teams will be less competitive.
(b) It won't.
Suppose the large market team in a league had to send a lump sum of $15 million per year to the small market in their league. According to our two team fixed talent model, how would this affect player salaries? (a) The small market teams would improve at the expense of the large market teams. (b) It wouldn't. (c) Both teams would improve winning percentages. (d) Both teams would lose more games.
(b) It wouldn't.
Which competitive balance measure has the lease effect on competitive balance? (a) Reverse finish draft order (b) Lump sum transfers from large teams to small from gate revenue sharing programs (c) Salary caps (d) Luxary Tax
(b) Lump sum transfers from large teams to small from gate revenue sharing programs
If a team is win maximizing, which is always true? (a) MC=MR (b) MC=AR (c) MR=0 (d) All of the above
(b) MC=AR
Which characteristic must happen for a revenue sharing policy to have a long run effect on competitive balance in a sports league? (a) Total revenue must increase for the small m market teams (b) Marginal revenue (with respect to wins) must increase for the small market teams (c) Salary caps must be installed (d) All of the above
(b) Marginal revenue (with respect to wins) must increase for the small market teams
Which league tupe typically includes relegation and promotion? (a) Closed leagues (b) Open leagues
(b) Open leagues
Which is true of a regional monopoly in sports (where Q > 1)? (a) P < MR (b) P > MR (c) P = MR (d) It depends on the quantity produced
(b) P > MR
In the two team fixed talent model which area describes payroll for the large market team? a) P* ∗ MR*L (b) P* ∗ W*L (c) MR*L ∗ W*L (d) P* ∗ D*L
(b) P* ∗ W*L
Which describes marginal revenue product of labor for a baseball player? (a) Profits per win * Wins above replacement (b) Revenue per win * Wins above replacement (c) Revenue per win * Wins above replacement - Salary (d) Revenue per win - salary
(b) Revenue per win * Wins above replacement
Cost Benefit analysis of stadium subsidies has generally found: (a) Stadium subsidies bring the city more revenue than they cost. (b) Stadium subsidies cannot be justified with cost benefit analysis. (c) Stadium subsidies paid through sales tax are justified, while those paid through property taxes are not. (d) None of the above
(b) Stadium subsidies cannot be justified with cost benefit analysis.
Cost benefit analysis of stadium subsidies has generally found (a) Stadium subsidies bring the city more revenue than they cost (b) Stadium subsidies cannot be justifies with cost benefit analysis (c) Stadium subsidies paid through sales tax are justifies, while those paid through property taxes are not (d) None of the above
(b) Stadium subsidies cannot be justifies with cost benefit analysis
Which is true of the "All or Nothing" demand curve and the power of the IOC? (a) The IOC officials have never been accused of corruption (b) The IOC uses market power to get cities to host events that lose money (c) Countries are able to bid on hosting only part of the Olympics (d) The cost of hosting additional events is taken out of the IOC's portion of television revenue
(b) The IOC uses market power to get cities to host events that lose money
According to The Baseball Economist by JC Bradbury, the lack of left handed catchers ion MLB is partially due to opportunity costs. Which of the following best fits with an opportunity cost explanation? (a) Left handed catchers don't get opportunities due to manager biases (b) The arm strength necessary to be an MLB catcher is comparable to that of an MLB pitcher and left handed pitchers are more valuable that catchers (c) Pitchers are uncomfortable throwing to left handed catchers (d) Catchers get fewer at bats
(b) The arm strength necessary to be an MLB catcher is comparable to that of an MLB pitcher and left handed pitchers are more valuable that catchers
Which of the following is often underestimated in estimates of economic impact of a mega event? (a) Usage of facilities built to host the event (b) Total expenditures (c) Long run benefits of hosting (d) Total revenue
(b) Total expenditures
Which is not an example of price discrimination? (a) Student prices (b) Variable pricing (c) Bundling (d) None of the above
(b) Variable pricing
Which best describes marginal revenue product for a baseball pitcher? (WAR=Winsabove replacement) (a) WAR+Revenue per win (b) WAR*Revenue Per Win (c) WAR/Revenue per win (d) Team Wins when player started Game * Revenue per win
(b) WAR*Revenue Per Win
What type of market does the NFL have in purchasing professional football labor? (a)Monopoly (b)Monopsony (c)Competitive (d)Competitive Monopoly
(b)Monopsony
You have been tasked with estimating the demand function of ticket sales for the Columbus Crew ( a regional monopoly). You found a demand function P = 5000 - 2Q. At which quantity is revenue maximized? (a) 2500 (b) 5000 (c) 1250 (d) None of the above
(c) 1250
You have been tasked with estimating the demand function of ticket sales for the Columbus Crew (a regional monopoly). You found a demand function Pt= 5000 −2Qt. Whichdescribes marginal revenue? (a) 2500 −4Qt (b) Q(5000 −2Qt) (c) 5000 −4Qt (d) 2500 −2Qt
(c) 5000 −4Qt
In the two team competitive balance model, if the small market team is profit maximizing and the large market team is win maximizing which is true at the equilibrium winning percentages. (a) The small market team will win more (b) MR(L)=MR(S) (c) AR(L)=MR(S) (d) All of the above
(c) AR(L)=MR(S)
Which of the following allows affected parties to sue monopolies? (a) Salary Cap (b) Sherman Antitrust Act (c) Clayton Act (d) Natural Monopoly
(c) Clayton Act
Who owns the majority of Nationwide arena? (a) Nationwide Insurance (b) Columbus Blue Jackets (c) Franklin County (d) The state of Ohio
(c) Franklin County
Which is true of host countries in the Olympic games? a) Host countries own the broadcast rights. (b) Host countries typically use existing structures to house the Olympic games. (c) Host countries typically spend more than they anticipated. (d) All of the above
(c) Host countries typically spend more than they anticipated.
Which is true when elasticity=1? (a) Marginal Revenue= Total Revenue (b) Marginal revenue = 0 (c) Marginal Revenue is maximized (d) Marginal Revenue is positive
(c) Marginal Revenue is maximized
Which best describes the consensus of cost benefit analysis for stadium subsidies? (a) Stadium subsidies produce more revenue for the city than the city forfeits in subsi-dies. (b) Stadium subsidies are justified through additional development value (c) Stadium subsidies are rarely justified (d) Stadium subsidies can be justified by the state, but not the city, because neighboringareas serve as free riders.
(c) Stadium subsidies are rarely justified
Which of the following describes the winner's curse in relation to bidding on the FIFA world cup? (a) The country that bids the most must also bribe FIFA officials. (b) The country that hosts the World Cup does not get to keep the TV revenue. (c) The country that bids the most probably exaggerated the value of hosting by the most. (d) All of the above
(c) The country that bids the most probably exaggerated the value of hosting by the most.
Which describes collusion among team owners in the NFL? (a) TV Blackout areas (b) Salary Caps (c) The draft (d) All of the above
(c) The draft
Which is true of a profit maximizing sports franchise? (a) The franchise will maximize wins (b) The franchise will always set ticket prices so that games sell out (c) The franchise's team quality will partly depend on the city's demand for winning (d) The franchise will do whatever local sports radio guys suggest
(c) The franchise's team quality will partly depend on the city's demand for winning
If the top five market size teams in MLB sent a $20 million check to the bottom five market size teams every year, which would be the likely result, according to our model for competitive balance? (a) Competitive Balance would be unaffected. (b) Win Percentage for the large market team will increase. (c) Win percentage for the small market team will increase. (d) Salaries (the price of talent) will decrease.
(c) Win percentage for the small market team will increase. *
If $200 is spent on a public project and the propensity to consume is 0.9, what will be the total economic impact? (Assuming there is no leakage.) (a)$200 (b)$180 (c)$2000 (d)$20
(c)$2000
Including all costs, the Crew spend $8 per seat to host a game. Seats are sold for $15, but Sally is willing to pay $27. What is her consumer surplus? (a) $0 (b) $5 (c) $7 (d) $12
(d) $12
How have fans benefited from new stadium construction in the last 20-30 years? (a) Single sport stadiums have become more prevalent, providing better viewing. (b) Newer construction techniques have eliminated many of the obstructed view seats. (c) Newer stadiums are more aesthetically pleasing. (d) All of the above
(d) All of the above
Under which of the following scenarios would a subsidy be socially beneficial? (Assuming the subsidy is correctly specifies and the taxes necessary to pay the subsidy are a sunk cost) (a) Consumer surplus is larger than the total subsidy cost (b) Marginal benefits to society are not all captured by ticket demand (c) Additional economic benefit is large enough to justify the subsidy (d) All of the above
(d) All of the above
Which factors effect NFL ticket demand in a given city? (a) Populations (b) Presence of other professional teams (c) Demographics of the city (d) All of the above
(d) All of the above
Which figures are included in calculations of a total subsidy for a stadium? (a) Tax abatements granted to the stadium (b) Upgrades necessary for utilities (c) Loans at a discounted interest rate (d) All of the above
(d) All of the above
Which figures are included ion calculations of a total subsidy for a stadium? (a) Tax abatements granted to the stadium (b) Upgrades necessary for utilities (c) Loans at a discounted rate (d) All of the above
(d) All of the above
Which is true of municipal bonds? (a) Bonds are typically used to fund stadiums (b) Municipal bonds are a large portion of the total subsidies given to build stadiums (c) profits earned by the bond purchaser are not taxed the same as corporate bonds (d) All of the above
(d) All of the above
Which of the following are leakages in stadium projects funded by a city? (a) Many of the contractors for the stadium live outside the city (b) Most of the athletes live outside the city (c) Raw materials need to be imported (d) All of the above
(d) All of the above
Which of the following can cause some teams to be perennially food and some to be perennially bad in the NFL? (a) Tickets sales response to winning differing by city (b) Populations (c) Defined regional monopolies (d) All of the above
(d) All of the above
Which of the following increases player's bargaining power in the NBA? (a) A new basketball league, the ABA is formed. (b) Expected career length is lengthened by medical advances (c) Owners only receive stadium subsidies under the condition that 1 million people peryear attend games. (d) All of the above
(d) All of the above
Which of the following increases player's bargaining power in the NFL? a) A new football league, the XFL is formed. (b) Expected career length is lengthened by medical advances (c) Owners only receive stadium subsidies under the condition that 1 million people per year attend games. (d) All of the above
(d) All of the above
Which of the following is a result of perfect price discrimination? (a) Consumer surplus is decreased (b) Revenue is increased (c) Different types of consumers pay different prices (d) All of the above
(d) All of the above
Which of the following is a result of price discrimination? (a) Consumer surplus is decreased (b) Revenue is increased (c) Different types of consumers pay different prices (d) All of the above
(d) All of the above
Which of the following is a scarce resource in sports? (a) Athletic talent (b) Tickets (c) Money (d) All of the above
(d) All of the above
Which of the following is caused by territory definition in professional sports leagues? (a) Market power for franchises (b) Competitive Imbalance (c) Leverage for stadium subsidies (d) All of the above
(d) All of the above
Which of the following is true of ex ante reports which predict financial windfalls to countries hosting the Olympics or the World Cup? (a) Benefits are exaggerated (b) Costs are underestimated. (c) Reports are paid for by organizations that will benefit from the city or country hosting. (d) All of the above
(d) All of the above
Which of the following is true regarding franchise profits? (a) Sports leagues can increase member franchise profits by restricting the number of approved franchises in each region (b) Sports leagues can increase member franchise profits by working to restrict the number of rival leagues franchises in each region (c) Sports leagues as a while have higher profits when large market teams are successful (d) All of the above
(d) All of the above
Which of the following policies restrict pay for players in the NBA? (a) Rookie contract structure (b) The draft (c) Salary cap (d) All of the above
(d) All of the above
Which scenarios would lead to a revenue maximizing NBA owner raising prices? (a) Price elasticity (b) An NHL franchise leaves town (c) An economic boom increase median income in the city (d) All of the above
(d) All of the above
Which scenarios would lead to a revenue maximizing NBA owner raising prices? (a) Price elasticity was less than one (b) An NHL franchise leaves town (c) An economic boom increases median income in the city (d) All of the above
(d) All of the above
In a supply and demand graph for a labor market, which is true? (a) The demand curve is derived from the value of the marginal productivity of workers. (b) The supply curve is derived from players willing to sign contracts. (c) The price is the wage. (d) All of the above.
(d) All of the above.
Under which of the following scenarios would a subsidy be socially beneficial? (Assuming the subsidy is correctly specified and the taxes necessary to pay the subsidy are a sunk cost.) (a) Consumer surplus is larger than the total subsidy cost. (b) Marginal benefits to society are not all captured by ticket demand. (c) Additional economic activity is large enough to justify the subsidy. (d) All of the above.
(d) All of the above.
Which is true of baseball's reserve clause? (a) Teams retain player rights indefinitely under the reserve clause. (b) It ended in the 1970s. (c) The reserve clause prevented free agency. (d) All of the above.
(d) All of the above.
Which of the following is caused by territory definition in professional sports? (a) Market power for franchises. (b) Competitive Imbalance (c) Leverage for stadium subsidies. (d) All of the above.
(d) All of the above.
Which of the following describes sequencing value? (a) Mike Ilitch owning both the Detroit Tigers and the Detroit Red Wings (b) NBC following the Super Bowl with an episode of the office (c) Fox running ads for The Simpsons during the super bowl (d) B & C
(d) B & C
Which is an example of an open league? (a) NFL (b) NHL (c) NBA (d) None of the above
(d) None of the above
Which statistic is higher when teams are more competitively balanced? (a) gini coefficient (b) Standard deviation of Winning Percentage (c) HHI of championships (d) None of the above
(d) None of the above
In a labor market supply and demand graph the price is? (a) Ticket Price (b) Hours worked (c) MPL (d) Salary
(d) Salary
What are the two biggest revenue sources for the NFL teams? (a) Sponsorship and Licensing (d) Ticket sales and concessions (c) TV Money and licensing (d) TV Money and ticket sales
(d) TV Money and ticket sales
Which is true of franchises that have recently built new stadiums? a) Typically the team gets worse. (b) Typically the team will be better and stay better for a long (> 10 years) period of time. (c) Typically team performance in unaffected by new stadiums. (d) Typically the team performs better for a short (< 10 years) period of time.
(d) Typically the team performs better for a short (< 10 years) period of time.
Which of the following is a pure public good?* (a) attending fames for a local team (b) watching a local team on television (c) All of the given answers (d) cheering for a local team
(d) cheering for a local team