Question 1

The positive externality argument in favor of a city seeking a professional sports franchise is

Accepted Answer

A) the jobs created in the area will make it worth the investment. 
B) there are people in the city that will be happier when the team is in the city and they will be the one who buy tickets. 
C) there are people in the city that will be happier when the team is in the city even if they do not buy tickets. 
D) that the benefits occur at a different time as the costs. 
A) the jobs created in the area will make it worth the investment. 
B) there are people in the city that will be happier when the team is in the city and they will be the one who buy tickets. 
C) there are people in the city that will be happier when the team is in the city even if they do not buy tickets. 
D) that the benefits occur at a different time as the costs.

Question 2

The Larry Bird exception to the salary cap allows

Accepted Answer

A) teams to sign players out of high school. 
B) teams to sign their own stars in order to keep them. 
C) teams to sign other team's stars to allow competitive balance. 
D) players to be paid while injured and not have their salaries count against the cap. 
A) teams to sign players out of high school. 
B) teams to sign their own stars in order to keep them. 
C) teams to sign other team's stars to allow competitive balance. 
D) players to be paid while injured and not have their salaries count against the cap.

Question 3

The sport where the teams winning the championship are almost always from a narrow list of teams is

Accepted Answer

A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer. 
A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer.

Question 4

The clause which bonds a player to his former team was known as the

Accepted Answer

A) free agency clause. 
B) reserve clause. 
C) competition clause. 
D) Santa clause. 
A) free agency clause. 
B) reserve clause. 
C) competition clause. 
D) Santa clause.

Question 5

In general, team owners move to a new city

Accepted Answer

A) to get a new stadium. 
B) to get more luxury box revenue. 
C) to win. 
D) to get a new stadium and to get more luxury box revenue. 
A) to get a new stadium. 
B) to get more luxury box revenue. 
C) to win. 
D) to get a new stadium and to get more luxury box revenue.

Question 6

Which of the following teams is not in its original franchise?

Accepted Answer

A) The Tennessee Titans (football). 
B) The Green Bay Packers (football). 
C) The Pittsburgh Steelers (football). 
D) The Kansas City Royals (baseball). 
A) The Tennessee Titans (football). 
B) The Green Bay Packers (football). 
C) The Pittsburgh Steelers (football). 
D) The Kansas City Royals (baseball).

Question 7

In NFL football, which of the following forms of revenue is not shared?

Accepted Answer

A) ticket receipts. 
B) television revenue. 
C) NFL licensing revenue. 
D) luxury box revenue. 
A) ticket receipts. 
B) television revenue. 
C) NFL licensing revenue. 
D) luxury box revenue.

Question 8

During the labor dispute of 2011, the owners contended that the NFL players were

Accepted Answer

A) decertifying their union as an artificial tactic. 
B) forming a players-owned league. 
C) striking. 
D) signing with Canadian teams. 
A) decertifying their union as an artificial tactic. 
B) forming a players-owned league. 
C) striking. 
D) signing with Canadian teams.

Question 9

The original sales price the Rooney family paid for the Pittsburgh Steelers was

Accepted Answer

A) $2,500. 
B) $2.5 million. 
C) $25 million. 
D) $2.5 billion. 
A) $2,500. 
B) $2.5 million. 
C) $25 million. 
D) $2.5 billion.

Question 10

The smallest metropolitan area in the United States that has at least one major league baseball, basketball, football, or hockey franchise is

Accepted Answer

A) Green Bay, Wisconsin. 
B) Indianapolis, Indiana. 
C) Oklahoma City, Oklahoma. 
D) Fargo, North Dakota. 
A) Green Bay, Wisconsin. 
B) Indianapolis, Indiana. 
C) Oklahoma City, Oklahoma. 
D) Fargo, North Dakota.

Question 11

Which statement is false, given what you know about the local substitution argument?

Accepted Answer

A) People in the town will buy their clothes with team logos on them so the economic impact of that buying must be counted as additional money to the city from having the sports team there. 
B) People in the town will go the games, therefore buying tickets, food and souvenirs causing the economy of the town to get better. 
C) People from out of town will go to the games therefore buying tickets, food and souvenirs causing the economy of the town to get better. 
D) People in the town will buy their clothes with team logos on them so the economic impact of that buying must be counted as additional money to the city from having the sports team there. Also, people in the town will go the games, therefore buying tickets, food and souvenirs causing the economy of the town to get better. 
A) People in the town will buy their clothes with team logos on them so the economic impact of that buying must be counted as additional money to the city from having the sports team there. 
B) People in the town will go the games, therefore buying tickets, food and souvenirs causing the economy of the town to get better. 
C) People from out of town will go to the games therefore buying tickets, food and souvenirs causing the economy of the town to get better. 
D) People in the town will buy their clothes with team logos on them so the economic impact of that buying must be counted as additional money to the city from having the sports team there. Also, people in the town will go the games, therefore buying tickets, food and souvenirs causing the economy of the town to get better.

Question 12

A European soccer player who has completed a contract

Accepted Answer

A) can sell his services to the highest bidder because the teams from various leagues are bidding against one another. 
B) is bound to his previous team by the reserve clause. 
C) must stay within their country's league. 
D) must leave the league of their present country's team. 
A) can sell his services to the highest bidder because the teams from various leagues are bidding against one another. 
B) is bound to his previous team by the reserve clause. 
C) must stay within their country's league. 
D) must leave the league of their present country's team.

Question 13

If an athlete were to pick the sport where being the best at a position would easily allow you to move to a city destined to win a championship, it would be

Accepted Answer

A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer. 
A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer.

Question 14

Suppose an owner makes a substantial operating loss while owning a team, if history is any guide the money lost will be

Accepted Answer

A) compounded by the fact that the team will lose even more money when he sells the team. 
B) just about offset by the slight gain the owner will get when he sells the team. 
C) slightly more than offset by the gain the owner will get when he sells the team. 
D) much more than offset by the enormous gain the owner will get when he sells the team. 
A) compounded by the fact that the team will lose even more money when he sells the team. 
B) just about offset by the slight gain the owner will get when he sells the team. 
C) slightly more than offset by the gain the owner will get when he sells the team. 
D) much more than offset by the enormous gain the owner will get when he sells the team.

Question 15

Under a free agent structure the wage paid to a professional athlete is likely to be close to his

Accepted Answer

A) reservation wage. 
B) marginal revenue product. 
C) average compensation. 
D) deadweight loss. 
A) reservation wage. 
B) marginal revenue product. 
C) average compensation. 
D) deadweight loss.

Question 16

Football franchise movement since 1970 has generally seen teams move from

Accepted Answer

A) larger cities to smaller ones. 
B) smaller cities to larger ones. 
C) richer cities to poorer ones. 
D) there has been no pattern. 
A) larger cities to smaller ones. 
B) smaller cities to larger ones. 
C) richer cities to poorer ones. 
D) there has been no pattern.

Question 17

The market power in racing goes to the

Accepted Answer

A) owners of the independent tracks. 
B) drivers. 
C) owners of the respective racing series. 
D) fans. 
A) owners of the independent tracks. 
B) drivers. 
C) owners of the respective racing series. 
D) fans.

Question 18

If an athlete were to pick the sport where it would be the easiest to move to a desired city it would be

Accepted Answer

A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer. 
A) NBA basketball. 
B) NFL football. 
C) Major League Baseball. 
D) European soccer.

Question 19

The economic contribution of a sports franchise to a community is roughly on the same order of magnitude as a

Accepted Answer

A) new McDonald's on a city street. 
B) a new automobile factory. 
C) a new Walmart Supercenter. 
D) a hotdog stand. 
A) new McDonald's on a city street. 
B) a new automobile factory. 
C) a new Walmart Supercenter. 
D) a hotdog stand.

Question 20

In golf and tennis, there is little concern over player strikes because

Accepted Answer

A) even the average players make more than the stars in the other sports. 
B) the golf and tennis owners have always been fair. 
C) there is a direct relationship between winning and earning. 
D) they are amateurs and do not wish to be paid. 
A) even the average players make more than the stars in the other sports. 
B) the golf and tennis owners have always been fair. 
C) there is a direct relationship between winning and earning. 
D) they are amateurs and do not wish to be paid.

Exam 43: If We Build It, Will They Come and Other Sports Questions

The positive externality argument in favor of a city seeking a professional sports franchise is

The Larry Bird exception to the salary cap allows

The sport where the teams winning the championship are almost always from a narrow list of teams is

The clause which bonds a player to his former team was known as the

In general, team owners move to a new city

Which of the following teams is not in its original franchise?

In NFL football, which of the following forms of revenue is not shared?

During the labor dispute of 2011, the owners contended that the NFL players were

The original sales price the Rooney family paid for the Pittsburgh Steelers was

The smallest metropolitan area in the United States that has at least one major league baseball, basketball, football, or hockey franchise is

Which statement is false, given what you know about the local substitution argument?

A European soccer player who has completed a contract

If an athlete were to pick the sport where being the best at a position would easily allow you to move to a city destined to win a championship, it would be

Suppose an owner makes a substantial operating loss while owning a team, if history is any guide the money lost will be

Under a free agent structure the wage paid to a professional athlete is likely to be close to his

Football franchise movement since 1970 has generally seen teams move from

The market power in racing goes to the

If an athlete were to pick the sport where it would be the easiest to move to a desired city it would be

The economic contribution of a sports franchise to a community is roughly on the same order of magnitude as a

In golf and tennis, there is little concern over player strikes because

Economics: the Study of Opportunity Cost

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Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

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