Question 1

The additional cost incurred as a result of hiring an additional worker is the firm's

Accepted Answer

A)  Total cost of labor
B)  Marginal cost of labor
C)  Average cost of labor
D)  Labor cost
E)  Human capital cost of labor

Question 2

Most economists argue that professional sports teams should be used as an economic development tool for local communities.

Accepted Answer

A) True 
 B)False

Question 3

Profits are more equally distributed in a competitive industry than in an industry dominated by a cartel.

Accepted Answer

A) True 
 B)False

Question 4

A work stoppage initiated by management is called a lock-out.

Accepted Answer

A) True 
 B)False

Question 5

From an economic perspective,all professional athletes are overpaiD.

Accepted Answer

A) True 
 B)False

Question 6

Professional athletes do not earn their pay from an economic perspectivE.

Accepted Answer

A) True 
 B)False

Question 7

A cartel is more likely to be successful if

Accepted Answer

A)  Cartel members produce most of the output in the market
B)  Market output is heterogeneous
C)  Members overlap in their control of market territories
D)  All of the above
E)  None of the above

Question 8

Teams that belong to professional sports leagues are

Accepted Answer

A)  Cartel members
B)  In business to make a profit
C)  Monopsony employers
D)  All of the above
E)  None of the above

Question 9

To maximize profit,a monopsony will hire workers up to the point where

Accepted Answer

A)  MC = MR
B)  D = S
C)  MCL = MRP
D)  MCL = P
E)  MR = P

Question 10

A cartel is a "shared monopoly."

Accepted Answer

A) True 
 B)False

Question 11

The relatively high salaries paid to professional athletes reflect

Accepted Answer

A)   Their contribution to team revenue
B)   The exploitation of fans
C)   Their contribution to society's general well-being
D)   The success of labor union representation
E)   The social value of professional sports

Question 12

Which of the following is a work stoppage initiated by workers?

Accepted Answer

A)  Lockout
B)  Strike
C)  Mediation
D)  Arbitration
E)  Monopsony

Question 13

The "civic pride" enjoyed by a major league city has no economic valuE.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is the best economic reason for taxpayers to support the development of facilities for professional sports teams?

Accepted Answer

A)  The intangible spillover benefits of the team,such as civic pride
B)  The number of jobs that will be created by the team
C)  The economic impact on the city due to ticket sales
D)  The new taxes that will be paid by the players and coaches
E)  The tourists that will visit town while attending home games

Question 15

Why does a monopsony's marginal cost of labor (MCL) curve lie above the market supply of labor curve? Because the monopsony

Accepted Answer

A)  Must raise the wage it pays all employees in order to attract and hire additional workers
B)  Must pay higher wages to only the last workers hired in order to attract and hire additional workers
C)  Faces the market demand and marginal revenue curves
D)  Must lower the wage it pays all employees in order to maintain profitability
E)  Has such high labor costs relative to the supply of labor

Question 16

In football,new players can sell their services to the highest bidding NFL team.

Accepted Answer

A) True 
 B)False

Question 17

The reserve clause helped to raise the salaries of professional baseball players.

Accepted Answer

A) True 
 B)False

Question 18

When a professional sports league sells broadcast rights for the entire league,

Accepted Answer

A)  The selling price will be higher than the price that would be charged if each team individually sold broadcast rights
B)  Fewer games will be broadcast than would be if each team individually sold broadcast rights
C)  Joint profits among all teams in the league can be maximized
D)  (a) and (b) 
E)  All of the above

Question 19

Which of the following conditions can give rise to a monopsony employer?

Accepted Answer

A)  Mobile workers with limited skills
B)  Legal protection from anti-trust laws and a mobile workforce
C)  Immobile workers with highly specialized skills
D)  A cartel agreement that results in raising joint profits
E)  A merger between two unrelated firms

Question 20

When does a firm experience monopsony profits?

Accepted Answer

A)  Only when the marginal cost of labor is greater than the marginal revenue product of labor
B)  When the total revenue exceeds the marginal cost of production
C)  Only when the marginal revenue product of labor exceeds the marginal cost of labor
D)  Only when the firm is a member of a cartel
E)  When the firm is a monopoly in its product market

Exam 9: The Economics of Professional Sports: What Is the Real Score

Why does a monopsony's marginal cost of labor (MCL) curve lie above the market supply of labor curve? Because the monopsony

Correct AnswerverifiedShow Answer

The relatively high salaries paid to professional athletes reflect

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When a professional sports league sells broadcast rights for the entire league,

Correct AnswerverifiedShow Answer

Which of the following is the best economic reason for taxpayers to support the development of facilities for professional sports teams?

Correct AnswerverifiedShow Answer

Teams that belong to professional sports leagues are

Correct AnswerverifiedShow Answer

To maximize profit,a monopsony will hire workers up to the point where

Correct AnswerverifiedShow Answer

Profits are more equally distributed in a competitive industry than in an industry dominated by a cartel.

Correct AnswerverifiedShow Answer

Professional athletes do not earn their pay from an economic perspectivE.

Correct AnswerverifiedShow Answer

The "civic pride" enjoyed by a major league city has no economic valuE.

Correct AnswerverifiedShow Answer

A work stoppage initiated by management is called a lock-out.

Correct AnswerverifiedShow Answer

The reserve clause helped to raise the salaries of professional baseball players.

Correct AnswerverifiedShow Answer

A cartel is more likely to be successful if

Correct AnswerverifiedShow Answer

Which of the following is a work stoppage initiated by workers?

Correct AnswerverifiedShow Answer

A cartel is a "shared monopoly."

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Which of the following conditions can give rise to a monopsony employer?

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The additional cost incurred as a result of hiring an additional worker is the firm's

Correct AnswerverifiedShow Answer

When does a firm experience monopsony profits?

Correct AnswerverifiedShow Answer

In football,new players can sell their services to the highest bidding NFL team.

Correct AnswerverifiedShow Answer

From an economic perspective,all professional athletes are overpaiD.

Correct AnswerverifiedShow Answer

Most economists argue that professional sports teams should be used as an economic development tool for local communities.

Correct AnswerverifiedShow Answer

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