Multiple Choice Quiz


1	Economists consistently advise state and local leaders
		A)	to invest in sports stadiums because they pay for themselves many times over in increased jobs.
		B)	to invest in sports stadiums because they are slightly better than alternative economic development alternatives.
		C)	that sports stadiums rarely return what alternative economic development alternatives will.
		D)	that sports stadiums for baseball have paid for themselves but the same can not be said for football.


2	For a sports team to justify the investment required by a city it would
		A)	have to sell out its facility.
		B)	attract the locals .
		C)	attract out-of-towners who would not have come to town were it not for the team.
		D)	all of these


3	An argument for publicly funding a stadium that economists accept as valid
		A)	is the negative externality argument that people enjoy having a team even if they have to pay high prices for tickets.
		B)	is the positive externality argument that people enjoy having a team (and will pay higher taxes to get them) even if they are not willing to go to games.
		C)	is the low cost argument that teams are historically less expensive to obtain than once feared.
		D)	is the collusion argument that working in concert team owners can get large amounts of subsidies from cities.


4	If a sports franchise garners the vast majority of it audience from the local area and the vast majority of the money they spend to go to games is money that would have been spent locally anyway, economists suggest
		A)	that this is local substitution and does not serve to build the local economy.
		B)	that this is enhancing multipliers and serves to build the local economy.
		C)	that there is no opportunity cost to building the stadium.
		D)	that this is a "reverse monopoly" and that it implies that the stadium should not be built.


5	The 1990s made clear that in major league baseball
		A)	you needed to spend a great deal on free agents to win even in the short run and that winning was the only way to make a profit.
		B)	you needed to spend a great deal on free agents to win over the long haul and that winning was the only way to make a profit.
		C)	you needed to spend a great deal on free agents to win over the long haul and that winning was absolutely no guarantee to making a profit.
		D)	free agency spending had no impact on winning.


6	When a team bargains with a player, the lowest wage the play will accept is
		A)	their marginal cost.
		B)	their marginal revenue product.
		C)	their reservation wage.
		D)	a living wage.


7	The reserve clause was important in baseball because it
		A)	kept salaries well below the players' reservation wage.
		B)	kept salaries well below the players' marginal revenue product.
		C)	kept salaries well above the players' reservation wage.
		D)	kept salaries well above the players' marginal revenue product.


8	Free agency brings salaries much closer to a player's
		A)	reservation wage .
		B)	marginal revenue product.
		C)	marginal social value.
		D)	total social worth.


9	Strikes and lockouts have been nearly nonexistent in
		A)	team sports generally (football, basketball, hockey).
		B)	baseball.
		C)	individual sports (gold, tennis).
		D)	sports generally.


10	A voluntary safety regulation in auto racing that slows speeds
		A)	has little effect because few will agree to abide by it.
		B)	has enormous impact because it makes everyone better off.
		C)	has more of an effect than a requirement.
		D)	causes people to actually drive less safely.

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