What market or economic forces work to undermine the effectiveness of these efforts to distribute talent evenly across teams in the league? Explain.

ECO 305 Spring 2016
The midterm exam is an optional course element. You are not required to answer any
questions. Should you choose to, you can answer as few as one (1) question or as many as five
(5) questions. Each question is worth a maximum of 20 points.
In preparing your answers, you may consult books, web sites, me or experts outside
Marymount (as long as you identify them). You may not consult other members of this class.
Cite all sources you use for data or ideas, including the textbook. (This is for your protection.)
When preparing your answers, assume you are answering for someone who is reasonably
intelligent, but unfamiliar with the course or its content. Fully explain the concepts you are
discussing. Demonstrate to me what you understand. In grading essay questions, you start
with “zero,” and I add points as I read your responses. There are certain, basic principles that
must be discussed, but the highest grades will be awarded to students with complete answers,
especially those providing unexpected (but economically correct) insights. There is, however, a
page limit. You may submit no more than 5 single-spaced, typewritten pages. 1
NOTE: This is not meant to indicate that you need to fill an entire page to answer a question
well. Quality is more important than quantity.
You may answer a maximum of 5 questions.
1. The truth is that 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.
2. Who benefits from secondary ticket market sites such as StubHub? Explain.
3. DC United (the Washington professional men’s soccer team) currently plays in RFK
Stadium (previously the home of the Washington Redskins and the Washington
Nationals). DC United has asked the city for a new, smaller stadium. Explain the
advantages of the team’s playing in a newer stadium with fewer seats.
4. In the U.S., teams in both Major League Baseball and the National Hockey League
operate minor league “farm” teams. Explore the advantages and disadvantages of
either the baseball or hockey league’s switching to a promotion and relegation system.
1 To be more specific, do not use a font below 11.

5. How would you expect the behavior of professional sports leagues change if teams had
corporate affiliations and owners rather than city or state affiliations and private
owners? Explain.
6. In the U.S., Major League Baseball enjoys a specific exemption from the antitrust laws
while the other professional sports leagues do not. Imagine that you are charged with
resolving this disparity. Would you (a) grant the other leagues an exemption like that
enjoyed by Major League Baseball or (b) remove MLB’s exemption and make it subject
to the antitrust laws? In choosing the route you would take, explain the advantages and
disadvantages of your proposed approach.
7. Team owners cite the pursuit of competitive balance as justification for many of the
constraints on the labor market for athletes (reverse order draft, revenue sharing, salary
caps, etc.). What market or economic forces work to undermine the effectiveness of
these efforts to distribute talent evenly across teams in the league? Explain.


Academic LevelCollege (1-2 years: Freshmen, Sophomore)
Subject AreaEconomics
Paper Type Essay
Number of Pages4 Page(s)/1100 words
Paper FormatMLA
SpacingDouble spaced

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