SM241 || WITH CERTIFIED ANSWERS.
Suppose that the Yankees had been purchased for an inflation adjusted ($2017) $22.5 million
rather than $11.1 million in 1915. Now what would have been the real rate of growth over the
same 83 year span? correct answers 4.6%
The revenues in the cardboard box industry swamp those of even the highest grossing pro sports
league, the NFL. Why is this a weak indicator of relative importance of cardboard boxes and
sports? correct answers Fan observed behavior suggests that sports are more important than just
the revenues they produce.
Which of the following indicate that sports are big business? correct answers All of the above
(Most of the "top 100" people in sports are sports business executives, Revenues appear to matter
to team success, Owners behave as if the bottom line matters to them)
Why do owners feel under-appreciated and often maligned? correct answers All of the above (It
is their capital investment that is on the line, Only owners actually face the cost of winning, It is
their business acumen that actually helps determine success or failure)
"Say I'm worth $1.1 billion, and through a series of incredibly moronic moves, I lose $100
million. Oh, gee! What does that leave me?" Mark Cuban, dot.com billionaire owner of the
Dallas Mavericks (Sports Illustrated November 6, 2000, p. 88).
Do you believe that Mr. Cuban really doesn't care if he blows $100 million in management
mistakes? What else is behind his statement? correct answers
According to Professor Rottenberg's uncertainty of outcome hypothesis, if a league gets too
imbalanced on the field then... correct answers All of the above (It risks losing fans of the worst
teams, It risks having to close down the worst teams in the league altogether, It risks losing
general fan interest in post-season play)
The way to eliminate the need to ration tickets is... correct answers Eliminate the scarcity of the
tickets.
,What happens to the demand for NFL games in Detroit if ticket price increases? correct answers
Demand stays the same.
What happens to the demand for NFL games in Detroit if informed fans find football less to their
liking due to the league's concussion problems? correct answers Demand decreases.
What happens to the demand for NFL games in Detroit if incomes rebound coming out of the
recession? correct answers If football is a normal good in Detroit, demand increases.
What happens to the demand for NFL football in Detroit if the price of season tickets to the
Detroit Opera Company falls? correct answers If football and opera are substitutes, demand
decreases.
Why does the ticket demand function for a college basketball team slope downward? correct
answers Only A and B (There are substitutes for this team's games, but they are imperfect
substitutes, The basketball team has market power)
Using the data in Table 2.2, what is the price elasticity of demand for Men's and Women's
basketball season tickets when the price falls from $30 to $20? (Round to one place right of the
decimal point.) correct answers Men's = 1.2, Women's = 3.0
If total revenue is increasing at a maximum, decreasing, then marginal revenue is... correct
answers Positive, Zero, Negative
If the current level of ticket sales is on the inelastic portion of the demand curve for a team's
tickets, then lowering price will... correct answers Decrease total revenues.
The NFL's Houston Oilers left Texas to become the Tennessee Oilers for the 1997 season. They
changed their name to the Tennessee Titans and moved into their new Adelphia Stadium for the
1999 season. Interestingly, their lowest-priced individual tickets were $12, while their lowest-
priced season ticket was $250.
, Given that there are only eight home games, why didn't rans just buy individual tickets rather
than season tickets?
Is this price discrimination? Explain.
Responses correct answers This is not price discrimination because season tickets and single-
game tickets are two distinct products. Season tickets come with certain benefits for the customer
outside the ticket itself. Fans buy season tickets to have perks that single-game tickets don't like
having the same seat every game or outside of game experiences and that is ultimately why they
pay more.
How do leagues and conferences sell programming? correct answers All of the above.
Which of the following do advertisements seek to establish? correct answers Both A and B.
Which of the following sports trails "none" for women? (Check all that apply) correct answers
Baseball
Which of the following pro leagues sells local broadcasts? correct answers All of the above
except C (MLB, NBA, and NHL all do, NFL does not)
Comcast Chairman/CEO said the following of the eventual agreement between Comcast and the
NFL Network: "I think both sides may have had to give a little more than they intended."
Economically, why is it the case that it was Comcast that did nearly all of the "giving"? correct
answers F*<P*-AC*
The "Winner's Curse" explains large leaps in the value of sports rights fees. correct answers False
According to your textbook, after subtracting the sale price to the Steinbrenner group, CBS lost
$? million on its ownership of the New York Yankees? correct answers $53.6 million
Suppose that the Yankees had been purchased for an inflation adjusted ($2017) $22.5 million
rather than $11.1 million in 1915. Now what would have been the real rate of growth over the
same 83 year span? correct answers 4.6%
The revenues in the cardboard box industry swamp those of even the highest grossing pro sports
league, the NFL. Why is this a weak indicator of relative importance of cardboard boxes and
sports? correct answers Fan observed behavior suggests that sports are more important than just
the revenues they produce.
Which of the following indicate that sports are big business? correct answers All of the above
(Most of the "top 100" people in sports are sports business executives, Revenues appear to matter
to team success, Owners behave as if the bottom line matters to them)
Why do owners feel under-appreciated and often maligned? correct answers All of the above (It
is their capital investment that is on the line, Only owners actually face the cost of winning, It is
their business acumen that actually helps determine success or failure)
"Say I'm worth $1.1 billion, and through a series of incredibly moronic moves, I lose $100
million. Oh, gee! What does that leave me?" Mark Cuban, dot.com billionaire owner of the
Dallas Mavericks (Sports Illustrated November 6, 2000, p. 88).
Do you believe that Mr. Cuban really doesn't care if he blows $100 million in management
mistakes? What else is behind his statement? correct answers
According to Professor Rottenberg's uncertainty of outcome hypothesis, if a league gets too
imbalanced on the field then... correct answers All of the above (It risks losing fans of the worst
teams, It risks having to close down the worst teams in the league altogether, It risks losing
general fan interest in post-season play)
The way to eliminate the need to ration tickets is... correct answers Eliminate the scarcity of the
tickets.
,What happens to the demand for NFL games in Detroit if ticket price increases? correct answers
Demand stays the same.
What happens to the demand for NFL games in Detroit if informed fans find football less to their
liking due to the league's concussion problems? correct answers Demand decreases.
What happens to the demand for NFL games in Detroit if incomes rebound coming out of the
recession? correct answers If football is a normal good in Detroit, demand increases.
What happens to the demand for NFL football in Detroit if the price of season tickets to the
Detroit Opera Company falls? correct answers If football and opera are substitutes, demand
decreases.
Why does the ticket demand function for a college basketball team slope downward? correct
answers Only A and B (There are substitutes for this team's games, but they are imperfect
substitutes, The basketball team has market power)
Using the data in Table 2.2, what is the price elasticity of demand for Men's and Women's
basketball season tickets when the price falls from $30 to $20? (Round to one place right of the
decimal point.) correct answers Men's = 1.2, Women's = 3.0
If total revenue is increasing at a maximum, decreasing, then marginal revenue is... correct
answers Positive, Zero, Negative
If the current level of ticket sales is on the inelastic portion of the demand curve for a team's
tickets, then lowering price will... correct answers Decrease total revenues.
The NFL's Houston Oilers left Texas to become the Tennessee Oilers for the 1997 season. They
changed their name to the Tennessee Titans and moved into their new Adelphia Stadium for the
1999 season. Interestingly, their lowest-priced individual tickets were $12, while their lowest-
priced season ticket was $250.
, Given that there are only eight home games, why didn't rans just buy individual tickets rather
than season tickets?
Is this price discrimination? Explain.
Responses correct answers This is not price discrimination because season tickets and single-
game tickets are two distinct products. Season tickets come with certain benefits for the customer
outside the ticket itself. Fans buy season tickets to have perks that single-game tickets don't like
having the same seat every game or outside of game experiences and that is ultimately why they
pay more.
How do leagues and conferences sell programming? correct answers All of the above.
Which of the following do advertisements seek to establish? correct answers Both A and B.
Which of the following sports trails "none" for women? (Check all that apply) correct answers
Baseball
Which of the following pro leagues sells local broadcasts? correct answers All of the above
except C (MLB, NBA, and NHL all do, NFL does not)
Comcast Chairman/CEO said the following of the eventual agreement between Comcast and the
NFL Network: "I think both sides may have had to give a little more than they intended."
Economically, why is it the case that it was Comcast that did nearly all of the "giving"? correct
answers F*<P*-AC*
The "Winner's Curse" explains large leaps in the value of sports rights fees. correct answers False
According to your textbook, after subtracting the sale price to the Steinbrenner group, CBS lost
$? million on its ownership of the New York Yankees? correct answers $53.6 million
