Presentation Transcript

1. Clicker Review
2. #1 The true cost of monopoly power to society is attributable to the higher price that consumers must pay the reduction in output by the monopolist the excess profits enjoyed by the monopolist the failure of other firms to enter the industry
3. #2 The monopoly power that the NCAA held over TV networks fell apart due to The prisoner’s dilemma The winner’s curse The outlawing of the reserve clause The entry of new schools into the NCAA
4. #3 Because of the rent gradient most stadiums are built for multiple purposes. on the outskirts of town. larger than they used to be. in the center of town.
5. #4 The Winner’s Curse suggests that teams that do well one season will do less well the next season. teams that win will be a burden to the team that hosts them. cities often lose teams with winning records. cities that attract a franchise typically pay too much
6. #5 The all-or-nothing demand curve allows colleges to under-compensate athletes the IOC to overcharge host cities football teams to move from city to city baseball to avoid the antitrust laws
7. #6 According to the Coase Theorem, free agency should leave the distribution of talent more equal than before less equal than before exactly equal among all teams the same as it always was
8. #7 You are conducting an economic impact analysis of bringing the Division III World Series back to Marietta. The direct spending impact is expected to be $60,000. The marginal propensity to consume is 0.80 and the people who receive the initial $60,000 live in the area only 9 months out of the year. What is the total impact of the World Series on Marietta? $48,000 $60,000 $150,000 $300,000
9. #8 Studies of the benefits of a team to a local community often overstate the multiplier because they do not account for inflation they do not consider leakages into surrounding communities They count only new expenditures they count expenditures by visitors from outside the region
10. #9 Most economists view tax revenues raised through state lotteries as progressive since rich people can afford to buy more tickets the best way to raise funds because no one has to buy tickets a poor idea since lottery tickets are inferior goods regressive since poor people spend a greater fraction of their income on tickets
11. To help pay for the cost of sport related injuries, the government imposes an excise tax on all sports equipment. Referring to the figure below, how much tax revenue has the government generated? #10 P2cbP1 P2caP0 P3edP1 P1baP0
12. #11 Just before the 2007 Daytona 500, NASCAR heavily fined several racing teams for using fuel additives that make cars go slightly faster. Why would NASCAR want to take steps to lower the speed of their race cars? Like MLB with steroids, NASCAR fears that if they don’t act to prevent the use of illegal substances, the federal government will step in instead to regulate their league. NASCAR fans prefer absolute quality over relative quality. NASCAR fans prefer relative quality over absolute quality. Slower cars provide for significantly better track safety.
13. #12 Given the following winning percentages of the teams in a league (for a single year) compute the within-season standard deviation for the league. 0.063 0.251 0.281 0.500
14. #13 Given the winning percentages of the teams from #12 in a league (for a single year) compute the within-season ratio R for the league if the league plays 20 games per season. 0.112 0.445 2.245 4.472