SM241 EXAM QUESTIONS WITH ACCURATE
ANSWERS RATED A+
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? - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER
According to Professor Rottenberg's uncertainty of outcome hypothesis, if a league
gets too imbalanced on the field then... - ANSWER 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... - ANSWER Eliminate the scarcity of
the tickets.
,What happens to the demand for NFL games in Detroit if ticket price increases? -
ANSWER 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? - ANSWER Demand decreases.
What happens to the demand for NFL games in Detroit if incomes rebound coming out of
the recession? - ANSWER 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? - ANSWER If football and opera are substitutes,
demand decreases.
Why does the ticket demand function for a college basketball team slope downward? -
ANSWER 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.) - ANSWER Men's = 1.2, Women's = 3.0
If total revenue is increasing at a maximum, decreasing, then marginal revenue is... -
ANSWER 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... - ANSWER 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 - ANSWER 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? - ANSWER All of the above.
Which of the following do advertisements seek to establish? - ANSWER Both A and B.
Which of the following sports trails "none" for women? (Check all that apply) - ANSWER
Baseball
Which of the following pro leagues sells local broadcasts? - ANSWER 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"? - ANSWER F*<P*-AC*
The "Winner's Curse" explains large leaps in the value of sports rights fees. - ANSWER
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? - ANSWER $53.6 million
Which of the following are the most likely advantage of media provider ownership of pro
sports teams? - ANSWER Just D & E above (Changing the competitive environment in
the broadcasting endeavor, Fun and profit from owning the team)
ANSWERS RATED A+
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? - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER
According to Professor Rottenberg's uncertainty of outcome hypothesis, if a league
gets too imbalanced on the field then... - ANSWER 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... - ANSWER Eliminate the scarcity of
the tickets.
,What happens to the demand for NFL games in Detroit if ticket price increases? -
ANSWER 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? - ANSWER Demand decreases.
What happens to the demand for NFL games in Detroit if incomes rebound coming out of
the recession? - ANSWER 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? - ANSWER If football and opera are substitutes,
demand decreases.
Why does the ticket demand function for a college basketball team slope downward? -
ANSWER 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.) - ANSWER Men's = 1.2, Women's = 3.0
If total revenue is increasing at a maximum, decreasing, then marginal revenue is... -
ANSWER 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... - ANSWER 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 - ANSWER 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? - ANSWER All of the above.
Which of the following do advertisements seek to establish? - ANSWER Both A and B.
Which of the following sports trails "none" for women? (Check all that apply) - ANSWER
Baseball
Which of the following pro leagues sells local broadcasts? - ANSWER 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"? - ANSWER F*<P*-AC*
The "Winner's Curse" explains large leaps in the value of sports rights fees. - ANSWER
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? - ANSWER $53.6 million
Which of the following are the most likely advantage of media provider ownership of pro
sports teams? - ANSWER Just D & E above (Changing the competitive environment in
the broadcasting endeavor, Fun and profit from owning the team)
