THE ECONOMICS OF SPORTS UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS COMPLETE STUDY GUIDE FULL
SOLUTION
●● The Civic Infrastructure period
Answer: Leagues expanded and teams relocated due to competing
franchises, new stadiums were built with taxpayer money.
●● The Public-Private Partnership Era
Answer: Three forces began to limit what cities could contribute to new
stadium construction, 90% publicly financed.
●● Changing stadium shapes
Answer: Cities constructed large, circular stadiums designed to host
football and baseball. The distinctive round shape and close resemblance
to one another called them cookie-cutter stadiums.
●● Present value
Answer: What a future payment is worth today, calculated because a
dollar today is worth more than a dollar a year from society.
●● Net present value
,Answer: Difference between the present value of the stream of revenues
generated by the project and the present value of its costs, value of a new
stadium to the owner.
●● New facilities effect
Answer: New facilities mean different fans, sometimes failed to draw
additional fans, sometimes increase attendance.
●● New facilities & wins
Answer: Does a new stadium increase wins? Claim more money to hire
better players, but studies found a stadium's age only affects winning
percentage in only baseball with only small effects.
●● Crowding out
Answer: Spending by some people at sporting events prevents spending
that other people would have made but are prevented from making by
the sporting event.
●● Substitutes spending
Answer: What would have been made on other activities within the
city/stadium but it is not 'new' unless it would've been saved or spent
elsewhere.
●● Central business district
, Answer: The tendency of businesses to locate in the center of a city.
●● Rent gradient
Answer: Rise in property values.
●● Spillover effects
Answer: The income earned by people employed at a forum or by firms
that benefit from it leads to added spending elsewhere in town.
●● Marginal propensity to consume
Answer: The fraction of an additional dollar of income that consumers
spend.
●● Multiplier effect
Answer: The spillover of added income and spending into the broader
economy.
●● Marginal propensity to import
Answer: The amount of an extra dollar of income that is spent on
imported goods.
●● Public good
ACTUAL QUESTIONS AND CORRECT
ANSWERS COMPLETE STUDY GUIDE FULL
SOLUTION
●● The Civic Infrastructure period
Answer: Leagues expanded and teams relocated due to competing
franchises, new stadiums were built with taxpayer money.
●● The Public-Private Partnership Era
Answer: Three forces began to limit what cities could contribute to new
stadium construction, 90% publicly financed.
●● Changing stadium shapes
Answer: Cities constructed large, circular stadiums designed to host
football and baseball. The distinctive round shape and close resemblance
to one another called them cookie-cutter stadiums.
●● Present value
Answer: What a future payment is worth today, calculated because a
dollar today is worth more than a dollar a year from society.
●● Net present value
,Answer: Difference between the present value of the stream of revenues
generated by the project and the present value of its costs, value of a new
stadium to the owner.
●● New facilities effect
Answer: New facilities mean different fans, sometimes failed to draw
additional fans, sometimes increase attendance.
●● New facilities & wins
Answer: Does a new stadium increase wins? Claim more money to hire
better players, but studies found a stadium's age only affects winning
percentage in only baseball with only small effects.
●● Crowding out
Answer: Spending by some people at sporting events prevents spending
that other people would have made but are prevented from making by
the sporting event.
●● Substitutes spending
Answer: What would have been made on other activities within the
city/stadium but it is not 'new' unless it would've been saved or spent
elsewhere.
●● Central business district
, Answer: The tendency of businesses to locate in the center of a city.
●● Rent gradient
Answer: Rise in property values.
●● Spillover effects
Answer: The income earned by people employed at a forum or by firms
that benefit from it leads to added spending elsewhere in town.
●● Marginal propensity to consume
Answer: The fraction of an additional dollar of income that consumers
spend.
●● Multiplier effect
Answer: The spillover of added income and spending into the broader
economy.
●● Marginal propensity to import
Answer: The amount of an extra dollar of income that is spent on
imported goods.
●● Public good
