ECON 340 EXAM 3 REVIEW QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026

ECON 340 EXAM 3 REVIEW QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026 A college player should turn pro when a) staying in college another year increases his earnings above the interest rate. b) staying in college another year increases his earnings below the interest rate. c) staying in college another year increases his earnings as much as possible. d) staying in college another year increases his earnings by 10%. - Answers b) staying in college another year increases his earnings below the interest rate. The pay of hockey players is so much below that of basketball players because a) the opportunity cost of hockey players is so much lower. b) the exchange rate favors teams in the United States over Canada. c) greater TV revenue increases the marginal revenue product in the NBA. d) greater TV revenue increases the marginal physical product in the NBA. - Answers c) greater TV revenue increases the marginal revenue product in the NBA. A player's marginal revenue product measures: a) The additional revenue a team earns from its playoff roster. b) The additional revenue a team earns from the additional productivity of one more player. c) The additional revenue a team earns on its concessions. d) The total revenue a team earns from its players. - Answers b) The additional revenue a team earns from the additional productivity of one more player. Compensation based upon tournament finishes are most likely to be observed: a) When players finish in rank order, with no meaningful margin of victory. b) When player effort is difficult or impossible to monitor. c) In individual rather than team sports. d) All of the above. - Answers d) All of the above. Relative to a perfectly-competitive labor market, a monopsonized one: a) Pays higher wages and hires more workers. b) Pays higher wages and hires fewer workers. c) Pays lower wages and hires more workers. d) Pays lower wages and hires fewer workers. - Answers d) Pays lower wages and hires fewer workers. The ruling that NBA teams did not have to pay guaranteed contracts during the NBA lockout probably a) caused the settlement to come quicker and more favorable to the union. b) caused the settlement to come slower and more favorable to the owners. c) had no effect on the settlement's timing but made it more favorable to the union. d) had no effect on the settlement's timing but made it more favorable to the owners. - Answers d) had no effect on the settlement's timing but made it more favorable to the owners. Sam Slugger has submitted a final offer to the arbitrator of $4.6m and he believes his probability of winning is 60%. His arbitration costs are $0.2m. The Pittsburgh Pirates have submitted a final offer of $3.5m and they believe their probability of winning is 60%. The Pirates arbitration costs are $.4m. Will Sam and the Pirates reaching a bargaining settlement and avoid arbitration? a) No, since there is no positive contract zone. b) Yes, since there is a positive contract zone. c) No, since there is a positive contract zone. d) Yes, since there is no positive contract zone. - Answers b) Yes, since there is a positive contract zone. Strikes generally occur as a result of: a) A need for consistency across contracts. b) Uncertainty. c) The threat of a new league. d) An attempt to damage the other side. - Answers b) Uncertainty. The diagram below illustrates the marginal revenue product and the supply curve facing a profit-maximizing sports team operating in a competitive market for player talent. Why will the team NOT acquire 500 units of talent in equilibrium? a) Additional talent units add more to revenue than to costs. b) The 500th unit of talent adds more to costs than to revenue. c) Additional talent units add more to costs than to revenue. d) The 500th unit maximizes revenue, not profits. - Answers c) Additional talent units add more to costs than to revenue. Jackie Robinson was the first African American a) to play Major League Baseball. b) to play Major League Baseball since the early 1890s. c) to play professional baseball in the United States. d) to play a professional sport of any kind in the United States. - Answers b) to play Major League Baseball since the early 1890s. Most mainstream economists view discrimination as a) a mistake due to the misperception of people's true skills. b) a way for capitalists to keep the working class from uniting. c) a taste. d) overstated. - Answers c) a taste. Integration was much faster in football than in baseball because: a) the owners in the NFL were less discriminatory than the owners in MLB. b) of the competition provided by a rival league. c) football fans are far less discriminatory than baseball fans. d) football had to get the approval of liberal-minded colleges and universities. - Answers b) of the competition provided by a rival league. The monopoly power that the NCAA held over TV networks before 1984 fell apart due to: a) The prisoner's dilemma b) The winner's curse c) The outlawing of the reserve clause d) The entry of new schools into the NCAA - Answers a) The prisoner's dilemma According to Becker, in a competitive market, discriminatory firms will: a) Be the most profitable. b) Be fined. c) Be driven out of business. d) Be the largest. - Answers c) Be driven out of business. Title IX requires that schools demonstrate: a) Proportionality and program expansion and accommodation of interests. b) Equality in spending on men's and women's sports. c) Proportionality or program expansion or accommodation of interests. d) Equality in programming for all sports. - Answers c) Proportionality or program expansion or accommodation of interests. The notion of a "student-athlete" was developed in order to a) assert the primacy of education. b) eliminate under-the-table payments to athletes. c) keep athletes from filing for workers' compensation. d) prevent gambling scandals. - Answers c) keep athletes from filing for workers' compensation. The economic theory of bureaucracy states that athletic directors a) spend too much because they are preoccupied with profits. b) spend too little because they are preoccupied with profits. c) spend too much because they lack a profit motive. d) spend too little because they lack a profit motive - Answers c) spend too much because they lack a profit motive. The NCAA operates as: a) An illegal cartel. b) A profit-maximizing cartel. c) An incidental cartel. d) An administrative liaison between collegiate amateur and professional sports. - Answers c) An incidental cartel. Explain fully what would happen to the following if free agency was abolished and we went back to the reserve clause: a) individual player salaries b) team profits