tailieunhanh - Lecture Issues in economics today - Chapter 40

After reading this chapter, you should be able to: Define economics and the features of the economic perspective, describe the role of economic theory in economics, distinguish microeconomics from macroeconomics and positive economics from normative economics, list the categories of scarce resources and delineate the nature of the economizing problem,. | Chapter 40 If You Build it Will They Come? And Other Sports Questions Chapter Outline THE PROBLEM FOR CITIES THE PROBLEM FOR OWNERS THE SPORTS LABOR MARKET THE VOCABULARY OF SPORTS LABOR ECONOMICS The Problem for Cities If a city wants a team should it wait for expansion? Cities that succeeded with expansion Football Jacksonville, Charlotte, Cleveland*, Houston* Baseball Miami, Tampa, Denver, Phoenix lure a team from another city? Cities that succeeded with luring others Football St. Louis, Memphis, Oakland-LA-Oakland, Baltimore The Economic Impact of a Sports Teams Are lures to sports franchises the same as lures to other business? Most economists, argue that sports teams do not offer much economic impact. The reasons are Few home games (8 in football up to 81 in baseball) Local substitution: the effect of the substitution of one economic activity for another within a community, so the net effect is zero. Money spent at the stadium is mostly money that would have been spent in the . | Chapter 40 If You Build it Will They Come? And Other Sports Questions Chapter Outline THE PROBLEM FOR CITIES THE PROBLEM FOR OWNERS THE SPORTS LABOR MARKET THE VOCABULARY OF SPORTS LABOR ECONOMICS The Problem for Cities If a city wants a team should it wait for expansion? Cities that succeeded with expansion Football Jacksonville, Charlotte, Cleveland*, Houston* Baseball Miami, Tampa, Denver, Phoenix lure a team from another city? Cities that succeeded with luring others Football St. Louis, Memphis, Oakland-LA-Oakland, Baltimore The Economic Impact of a Sports Teams Are lures to sports franchises the same as lures to other business? Most economists, argue that sports teams do not offer much economic impact. The reasons are Few home games (8 in football up to 81 in baseball) Local substitution: the effect of the substitution of one economic activity for another within a community, so the net effect is zero. Money spent at the stadium is mostly money that would have been spent in the city anyway. Why are Stadiums Publicly Funded The external benefits to a city that exist because a team is in the town. People in a city may enjoy following a local team and be willing to pay higher taxes to experience that enjoyment. The Problems for Owners To Move or to stay Owners often threaten to move to get better stadiums or luxury boxes added to existing stadiums. To Win or to Profit Small market teams rarely succeed in baseball because the bulk of revenue is locally derived (local TV deals) whereas this is not a factor in football because the revenue is generally shared. The Sports Labor Market To economists all firms compare the revenue they gain by having an employee, their marginal revenue product, with what that employee gets in wages and benefits. Sports is no different except there are often limits on what players can do. They can not pick the team they want to play for. agree to a lower salary than league minimums make so much that their team violates a salary cap. The .