Marymount Economics Assingment Help With Solution
1. Economists usually argue that price is the best way to allocate scarce goods (like tickets to popular sporting events). That is, price should rise or fall, depending on supply and demand, until an equilibrium is reached. Everyone who is willing and able to purchase a ticket will then be able to do so. It is often the case with sporting events, however, that price is set below the “market-clearing” level so that shortages develop. (More people want to buy tickets than there are tickets available.) We discussed three alternative methods other than price for allocating scarce tickets. Identify these and discuss the pros and cons of each.
2. Choose a team (any sport) that has performed poorly over the past several years. Explain why continued poor performance might reflect profit-maximizing behavior by the team owner. Include information about the team’s record and/or standing over the period you’re discussing.
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3. We discussed how competitive pressures in monopolistically competitive and even oligopolistic industries lead firms to increase costs until extranormal profits are competed away. Explain how continued subsidies for athletic departments at most universities (even the most successful) illustrates these competitive pressures.
4. In most cases, professional athletes are not actually sending all those tweets. The athletes (or their agents) pay people to tweet for them—at least part of the time. What economic theory best explains why athletes don’t do their own tweeting? Explain.
5. Form a hypothesis regarding one of the following relationships. You may apply your analysis to any league you choose. Specifically, does A cause B? Explain why or (if not) why not. What other factors might be important. Then use data from the most recent year to test for correlation. (Do the two variables move together?) Include your data and a graph.
a. Does (A) team success (number of wins) lead to (B) increased market value for the team?
b. Does (A) higher payroll lead to (B) more success (number of wins)?
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