Sports Economics Exam 1 Questions
and Answers
Economics - correct answer-study of how scarce resources are used to satisfy people's
unlimited wants & needs.
Scarcity - correct answer-there are not enough, nor can there ever be enough, goods &
services to satisfy the wants & needs of all individuals, families & society.
Choices made under scarcity - correct answer-1. Tradeoffs: giving up one thing for
something else
2. Value Judgment: the relative importance one assigns to an action/alternative.
Efficiency - correct answer-producing the largest attainable out of a desired quality w/ a
given set of resources; producing the lowest possible cost
Equity - correct answer-justice & fairness in the distribution of goods & services.
Microeconomics - correct answer-the study of issues that occur at the firm level, such
as supply, demand and pricing.
Macroeconomics - correct answer-the study of forces that affect numerous or even all
sectors of the overall economy, such as income, unemployment, & inflation at the
community, national, regional, or global level.
Regression Analysis - correct answer-predict the value of one variable on the basis of
other variables; most commonly used.
Dependent Variable - correct answer-variable to be forecast (item of interest in the
study)
Independent Variable - correct answer-various factors controlled or manipulated in the
study
Demand - correct answer-the different amount of a product that a buyer would purchase
at different prices in a defined time period when all non-price factors are held constant.
Supply - correct answer-the different amounts of a product that a seller would make
available for sale at different prices in a defined time period when a; non-price factors
are held constant.
, Price - correct answer-what the buyer is willing to give to obtain a good or service from
the seller.
Law of Demand - correct answer-negative relationship b/w price & quantity
Law of Supply - correct answer-positive relationship b/w price & quantity
Price Elasticity - correct answer-the strength/sensitivity of the response of both buyers &
sellers to changes in price
Price Elasticity in Sport - correct answer-In sport - primary determinant of attendance
pricing decisions by team owners
Strong response = price elastic (greater than 1)
Weak response = price inelastic (less than 1)
Elasticity of demand measures consumers & elasticity of supply measures producers
Price Discrimination - correct answer-charging different customers different amounts for
the same type of consumption or the same customer less for increased units of
consumption at a point in time based on willingness to pay rather than the cost of
service.
Absolute Advantage - correct answer-an activity when it is more efficient at that activity
than another person/country.
ex: U.S can make cancer drugs using fewer resources than Japan; absolute advantage
in making cancer drugs.
Comparative Advantage: - correct answer-when the opportunity cost of an activity is
lower than it is for another person/country.
ex: Babe Ruth was such a good hitter, the opportunity cost of using him as a pitcher
(the # of wins the team would sacrifice) was extremely high, much higher than for other
players; doesn't have a comparative advantage as a pitcher.
Production Function - correct answer-shows the relationship b/w quality of inputs used
& the quantity of output produced.
Marginal Effect - correct answer-the effect of one additional unit
Marginal Product - correct answer-the increase in output that results from a one-unit
increase in that input, holding the other input constant.
Marginal Cost - correct answer-the additional cost associated w/ an increase in output.
Uncertainty of Outcome - correct answer-a situation where a given contest w/n a league
structure has a degree of unpredictability about the result & by extension, that the
competition as a whole does not have a predetermined winner at the outset of
competition.
and Answers
Economics - correct answer-study of how scarce resources are used to satisfy people's
unlimited wants & needs.
Scarcity - correct answer-there are not enough, nor can there ever be enough, goods &
services to satisfy the wants & needs of all individuals, families & society.
Choices made under scarcity - correct answer-1. Tradeoffs: giving up one thing for
something else
2. Value Judgment: the relative importance one assigns to an action/alternative.
Efficiency - correct answer-producing the largest attainable out of a desired quality w/ a
given set of resources; producing the lowest possible cost
Equity - correct answer-justice & fairness in the distribution of goods & services.
Microeconomics - correct answer-the study of issues that occur at the firm level, such
as supply, demand and pricing.
Macroeconomics - correct answer-the study of forces that affect numerous or even all
sectors of the overall economy, such as income, unemployment, & inflation at the
community, national, regional, or global level.
Regression Analysis - correct answer-predict the value of one variable on the basis of
other variables; most commonly used.
Dependent Variable - correct answer-variable to be forecast (item of interest in the
study)
Independent Variable - correct answer-various factors controlled or manipulated in the
study
Demand - correct answer-the different amount of a product that a buyer would purchase
at different prices in a defined time period when all non-price factors are held constant.
Supply - correct answer-the different amounts of a product that a seller would make
available for sale at different prices in a defined time period when a; non-price factors
are held constant.
, Price - correct answer-what the buyer is willing to give to obtain a good or service from
the seller.
Law of Demand - correct answer-negative relationship b/w price & quantity
Law of Supply - correct answer-positive relationship b/w price & quantity
Price Elasticity - correct answer-the strength/sensitivity of the response of both buyers &
sellers to changes in price
Price Elasticity in Sport - correct answer-In sport - primary determinant of attendance
pricing decisions by team owners
Strong response = price elastic (greater than 1)
Weak response = price inelastic (less than 1)
Elasticity of demand measures consumers & elasticity of supply measures producers
Price Discrimination - correct answer-charging different customers different amounts for
the same type of consumption or the same customer less for increased units of
consumption at a point in time based on willingness to pay rather than the cost of
service.
Absolute Advantage - correct answer-an activity when it is more efficient at that activity
than another person/country.
ex: U.S can make cancer drugs using fewer resources than Japan; absolute advantage
in making cancer drugs.
Comparative Advantage: - correct answer-when the opportunity cost of an activity is
lower than it is for another person/country.
ex: Babe Ruth was such a good hitter, the opportunity cost of using him as a pitcher
(the # of wins the team would sacrifice) was extremely high, much higher than for other
players; doesn't have a comparative advantage as a pitcher.
Production Function - correct answer-shows the relationship b/w quality of inputs used
& the quantity of output produced.
Marginal Effect - correct answer-the effect of one additional unit
Marginal Product - correct answer-the increase in output that results from a one-unit
increase in that input, holding the other input constant.
Marginal Cost - correct answer-the additional cost associated w/ an increase in output.
Uncertainty of Outcome - correct answer-a situation where a given contest w/n a league
structure has a degree of unpredictability about the result & by extension, that the
competition as a whole does not have a predetermined winner at the outset of
competition.
