Question 1

The price of Super Bowl tickets sold by scalpers is likely to be

Accepted Answer

A)  less than face value.
B)  more than face value.
C)  exactly face value.
D)  independent of which teams are playing in the Super Bowl. B

Question 2

If the long-suffering Pittsburgh Pirates and Kansas City Royals were to meet in the World Series and their fans, realizing that another trip to the World Series would not some again for 50 years, were willing to pay three times the face-value price for tickets, economists would suggest that a scalping market would appear and it

Accepted Answer

A)  would make all ticket holders and potential buys worse off.
B)  would make all ticket holders and potential buys better off (or at least no worse off) .
C)  cause the price to fall below the face value.
D)  cause the price to fall back to the face value. B

Question 3

A promoter might charge less than the profit maximizing ticket price because

Accepted Answer

A)  like most promoters, she has deeply-felt charitable instincts.
B)  the talent that she represents may wish to play to a full arena for their own ego.
C)  she knows that the facility has absolutely no alternative use on the day of the event.
D)  all of the options are correct. B

Question 4

The StubHub's secondary baseball ticket market is an attempt by the league

Accepted Answer

A)  to capture profits made in the secondary market.
B)  to extend its monopoly in the primary ticket market to the secondary market
C)  to appear to charge lower ticket prices while effectively charging higher prices
D)  all of these

Question 5

When ticket scalping is legal, economists insist that the market so created ensures that

Accepted Answer

A)  the people who are willing to give up the most money will see the event.
B)  the people who care the most in their hearts will see the event.
C)  the promoter makes the most money possible.
D)  the performers make the most money possible.

Question 6

Figure 34.4
-Referring to Figure 34.4, the price that this promoter will choose will

Accepted Answer

A)  sell out the facility.
B)  be where the demand curve crosses the marginal cost curve.
C)  will be such that there are many empty seats.
D)  sell out the facility and will be where the demand curve crosses the marginal cost curve.

Question 7

Suppose one of baseball's most controversial records - the Bonds' career home run record - were on the line. Tickets to the games leading up to breaking of the record might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

Accepted Answer

A)  would make all ticket holders and potential buys worse off.
B)  would make all ticket holders and potential buys better off (or at least no worse off) .
C)  cause the price to fall below the face value.
D)  cause the price to fall back to the face value.

Question 8

Figure 34.5
-In Figure 34.5, the effect of a well-enforced anti-scalping law is to

Accepted Answer

A)  reduce the welfare of consumers and scalpers by GFB.
B)  increase the welfare of consumers by ABC.
C)  decrease the welfare of scalpers by AFGC.
D)  increase the welfare of consumers and decrease the welfare of scalpers.

Question 9

If scalpers were to charge exactly face value for tickets to a sold-out event, there would be

Accepted Answer

A)  more tickets traded in the market for scalped tickets.
B)  fewer tickets traded in the market for scalped tickets.
C)  no tickets traded in the market for scalped tickets.
D)  a scalped ticket available for every seat in the stadium.

Question 10

New Texas stadium was built with so that the team could sell "standing room only" tickets. People who buy these tickets can watch the game on televisions located around the facility or on catwalks that surround the stadium. Policing those fans (making sure they do not stand in the way of people who have seats is costly). In that case the MC curve would be

Accepted Answer

A)  upward sloping.
B)  a backward L.
C)  a forward L.
D)  downward sloping.

Question 11

The Ticketmaster-NBA collaborative is an attempt by the NBA

Accepted Answer

A)  to capture profits made in the secondary market.
B)  to extend its monopoly in the primary ticket market to the secondary market
C)  to appear to charge lower ticket prices while effectively charging higher prices
D)  all of these

Question 12

If you were going to expand a facility by adding 10% more seats, but because of the location of those seats the costs of providing ushers and other personnel to deal with the new seats was rising (on a per seat basis)the new MC curve would look like the previous one except that it would

Accepted Answer

A)  no longer be a backward L but would be upward sloping once the old capacity was reached.
B)  just shift to the right.
C)  just shift to the left.
D)  just shift up.

Question 13

If you were going to contract a facility by removing 10% of the older seats, but the costs of providing ushers and other personnel to deal with the remaining seats was exactly the same (on a per seat basis)as it had been , the new MC curve would look like the previous one except that it would

Accepted Answer

A)  no longer be a backward L but would be upward sloping once the old capacity was reached.
B)  just shift to the right.
C)  just shift to the left.
D)  just shift up.

Question 14

If the Boston Red Sox were playing the Chicago Cubs in the World Series and fans were willing to pay three times the face-value price for tickets, economists would suggest that a scalping market would appear and it

Accepted Answer

A)  would make all ticket holders and potential buys worse off.
B)  would make all ticket holders and potential buys better off (or at least no worse off) .
C)  cause the price to fall below the face value.
D)  cause the price to fall back to the face value.

Question 15

Economists see a useful service being performed by ticket scalpers, in that they

Accepted Answer

A)  lower the price to all consumers.
B)  raise the price so promoters get more money.
C)  adjust a price that a promoter has set too low.
D)  adjust a price that a promoter has set too high.

Question 16

Fans who purchase their tickets from ticket scalpers are likely to

Accepted Answer

A)  be much less wealthy than typical fans.
B)  have many other uses of their time that they consider to be close substitutes for the event.
C)  have had much less time to plan their attendance than typical fans.
D)  all of the options are correct.

Question 17

At capacity, the marginal cost of providing another ticket is

Accepted Answer

A)  the same as it was before capacity was reached.
B)  just a bit higher than it was before capacity was reached.
C)  very much higher than it was before capacity was reached.
D)  less than it was before capacity was reached.

Question 18

The marginal cost curve used to model promoter sold tickets to an event is

Accepted Answer

A)  u-shaped.
B)  check-shaped.
C)  L-shaped.
D)  backward L-shaped.

Question 19

Suppose, during the rapid expansion of NASCAR during the 1990s and 2000s, a racetrack owner kept expanding capacity to keep up with demand. Suppose further that fan interest in NASCAR diminished during the recession of 2007-2009. It would have been in that owner's best interest to

Accepted Answer

A)  reduce ticket prices so that sellouts would resume.
B)  spend money to reduce seating.
C)  set the ticket price to where MC=MR which may mean that there would not be a sellout.
D)  spend as much money on advertising as necessary to ensure a sellout.

Question 20

The profit maximizing promoter will

Accepted Answer

A)  sell a number of tickets equal to the capacity of the facility regardless of the price.
B)  sell less than the capacity of the facility regardless of price.
C)  sell more than capacity regardless of price.
D)  sell that number of tickets where the marginal cost equals the marginal revenue.

Exam 34: Ticket Brokers and Ticket Scalping