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Exam 9: The Economics of Professional Sports: What Is the Real Score

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Question 1

Multiple Choice

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When professional sports leagues seek to achieve parity,they are seeking

A) Fair wages
B) Competitive balance
C) Teams with an athletic advantage
D) Equal marginal revenue product across teams
E) Homogeneous views on league policies

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Question 2

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A profit maximizing sports club will hire players up to the point where the

A) Demand of labor equals marginal revenue product of labor
B) Supply of labor equals the marginal cost of labor
C) Marginal revenue product of labor equals the marginal cost of labor
D) Marginal cost of labor equals the wage rate
E) Wage equals the quantity of labor available

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Question 3

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Which of the following sports leagues can be considered a cartel?

The public relations benefit of a city's professional sports team is generally more valuable than the number of jobs it creates.

Professional sports leagues are both cartels and monopsonies.

If a cartel's marginal revenue is greater than its marginal cost,it should produce morE.

By adding new teams,professional sports leagues guarantee that existing member teams earn greater profits.

One way in which professional sports leagues enforce the monopsonistic employment of players is through

In the resource market,professional sports clubs must face the

Firms that coordinate their actions to maximize joint profits are said to have formed a(n)

If a worker adds 20 units to a firm's total output,the output is sold for $2 per unit,and the worker is paid $100,then the worker's marginal revenue product is

Economic factors cannot explain why teams relocate between cities.

In a product market with a cartel,prices will be _____ and output will be _____ than in a competitive market.

Which of the following best characterizes a cartel arrangement?

If a cartel discovers that its marginal cost is greater than marginal revenue,the cartel should

The Following Questions Refer to the graph below. -If this labor market is competitive,what wage will workers be paid?

By belonging to a cartel,a firm can guarantee that its individual profit will be greater than if it engaged in competition.

A monopsony must face the market supply of labor schedule because it is the only employer in the market.

A cartel exists when firms coordinate their actions in a manner to maximize joint profits.

Under which of the following conditions will a monopsony hire an additional worker? When