1. (2.5 Points) Suppose that you read a newspaper article reporting that the
economic impact of the new McCarthy Center on Gonzaga’s campus has
increased economic activity by $2 million per year. Assess this claim
economically. Is this a good indication that public subsidies for stadiums are
a good idea?
2. (2.5 Points) Explain how a new stadium might enhance the competitiveness of
particular team. Be very careful to state the particulars of the situation where this
3. (2.5 Points)
a. Why is it so hard to figure out whether or not increased revenues from
subsidies cause team quality to improve? How would you be able to
determine if subsidies improved a team’s quality?
b. Why might an MLB team's local TV contract value be the leading
indicator of whether or not team quality will improve after moving into a
4. (5 Points)
a. About 49 percent of the head coaches of women’s sports were women
according to the Race and Gender Report Card 2001. Does this mean
that there is hiring discrimination against women at that position? State
the arguments against that position. State the arguments supporting
that position. Can you draw any conclusions on this problem from
economic analysis? Explain.
b. Give the MRP explanation for why most male college basketball
coaches make more than most female coaches. Again, using the MRP
explanation, when will female coaches make more than male coaches?
Is the fact that no woman has ever been named head coach of a men’s
college basketball team evidence of discrimination in the labor market
5. (5 Points) Patrick Ewing played college basketball at Georgetown University.
According to the Chronicle of Higher Education (January 8, 1986), Ewing's
presence was worth about $12 million over his four-year college career– the value
of attendance at home games tripled, sales of memorabilia skyrocketed, and
additional TV appearances went with the success of the team. The athletic
department paid for the cost of Ewing's scholarship over the period, about
$48,600. What percent of Ewing’s MRP did Georgetown keep? Use this example
to argue why college athletes should be paid. Can you think of any reasons, given
this example, why college athletes should not be paid?
6. (5 Points) Team owners, with the threat of relocation, extract subsidies from their
state and local hosts, typically through new stadiums and arenas. Owners
typically argue that the subsidy is needed if the team is to remain competitive on
the field. But do these subsidies lead to better team performance? Or just to a
better economic position for the owner? Using the Excel file on blackboard for
stadiums and subsidies, calculate the average of attendance, revenue, and winning
percent for the period before the new/renovated arena and for the period after the
arena opened, for every arena. Do your results show that team performance
increases after the team gets a new arena (provide details)? Do your results show
an economic improvement for the owner (provide details)? If so, are the
improvements associated with increased team performance or not (provide
details)? Do your answers change if the stadium is being used for multiple
7. (2.5 Points) Explain the benefits of breaking up pro sports leagues. Would you
favor a breakup? Justify your answer (remember to discuss winners and losers).
|Due By (Pacific Time)||06/23/2014 12:00 pm|
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