Deck 13: The Business of Sport

Question 1

The NHL negotiates with television networks for broadcast rights fees.The return in excess of the resource owner's opportunity costs in this instance is referred to as:

A)cartel behaviour
B)economic rent
C)monopsony
D)oligarchical behaviour

Answer 1

B

Question 2

A market with only one seller is referred as a/an:

A)monopsony
B)cartel
C)oligarchy
D)monopoly

Answer 2

D

Question 3

How have professional athletes responded to monopsony power?

A)by striking periodically throughout history for higher wages and control over the league
B)by forming players' unions that exert monopoly power
C)by not playing to the best of their ability in order to reduce ticket sales
D)by phoning in sick before a game in a prearranged rotation

Answer 3

B

Question 4

Of the 149 teams discussed in the chapter on the business of sport,only one has a black ?man as its principal owner.Which team?

A)Edmonton Eskimos
B)Charlotte Bobcats
C)Green Bay Packers
D)Winnipeg Jets

Question 5

A/An _____ is a market with only one buyer.

A)monopsony
B)cartel
C)oligarchy
D)monopoly

Question 6

Sports leagues achieve monopoly status by doing all of the following,except:

A)prevent new competition
B)restrict output quantity and increase prices
C)produce a heterogeneous product
D)agree how to share monopoly power

Question 7

How does the market power generated by professional sports leagues reduce consumer welfare?

A)Cartel behaviour allows sports leagues to grant access to greater numbers of fans than ever before.
B)By restricting output,leagues deny access to live professional sports to fans in cities that would otherwise be able to support a team.
C)By reducing ticket prices,all fans can attend a game or watch games on television.
D)Revenue sharing and restricting players' movements represent a unique and beneficial feature of monopsony behaviour.

Question 8

A _____ is a group of two or more firms that formally agree to coordinate their production and pricing decisions to maximize joint profits.

A)monopoly
B)monopsony
C)cartel
D)free agency group

Question 9

The political economy of sport can be said to include all of the following,except:

A)the study of production,consumption,and economic transactions
B)the relationship between law and government and economic transactions
C)the distribution of wealth and income in economies
D)an analysis of the internal workings of local sport organizations

Question 10

Which of the following is TRUE of the reserve clause?

A)While the reserve clause existed at the onset of professional sports leagues,it no longer exists in any form today.
B)The reserve clause allows players the opportunity to negotiate with other teams for higher pay and other incentives.
C)In North America,players must play a specified number of seasons according to the reserve clause and then qualify for free agency.
D)The reserve clause has been,and is,promoted by players' associations as most beneficial for professional athletes.

Question 11

Which of the following best reflects price discrimination in professional sports ticket sales?

A)a discount for students at a MLB game
B)higher cost for seats closer to the ice at a hockey game
C)seats behind or close to a pillar at a NBA game
D)seats in the "nosebleed" section of an arena

Question 12

The National Hockey League was established in 1917 with a total of four teams.These teams were in which of the following cities?

A)Toronto,Montreal,and Ottawa
B)Toronto,Montreal,Winnipeg,and Saskatoon
C)Montreal,Hamilton,London,and Vancouver
D)Winnipeg,Ottawa,and Toronto

Question 13

Which of the following leagues/associations is currently the largest with 32 teams?

A)NBA
B)NHL
C)MLB
D)NFL

Question 14

The reverse entry draft format does all of the following,except:

A)generate monopsony power for teams
B)reduces salaries for incoming players
C)guarantees profits for the team
D)enhances competitive balance between teams

Question 15

Joint venture cooperation by sports leagues is best seen in:

A)the process of establishing a league schedule
B)establishing rules and regulations for play
C)establishing a process for determining the league champion
D)facility development

Question 16

North American sports franchises generate revenue from five sources.Which of the following ?is NOT one of these sources?

A)game day ticket sales,concessions,and parking
B)local television and radio broadcasting agreements
C)international advertising
D)postseason appearance revenue

Question 17

You are explaining to a friend the business of sport and note that _____ are the largest operating expense for each team in North American professional sports.

A)facility operating costs
B)players' salaries
C)travel expenses to away games
D)medical expenses for injured players

Question 18

In terms of U.S.millions of dollars,which of the following Canadian professional sports franchises is the most valuable?

A)Edmonton Eskimos
B)Calgary Flames
C)Toronto Raptors
D)Toronto Maple Leafs

Question 19

Sports leagues undertake two types of cooperative action:

A)single-entity and joint venture cooperation
B)monopolistic and oligarchical cooperation
C)forms of monopsony and monopoly
D)cartel and economic rent cooperation

Question 20

Which of the following does NOT exemplify a type of single-entity cooperation by ?sports leagues?

A)establishing a league schedule
B)establishing rules and regulations for play
C)establishing a process for determining the league champion
D)merchandising arrangements

Question 21

The International Olympic Committee is a:

A)monopsony
B)cartel
C)monopoly
D)oligarchy

Question 22

Why is the NHL most commonly associated with the idea of a small market franchise?

A)Canadian franchises pay their players in Canadian,not American,dollars.
B)Of all professional sports leagues,the NHL has the lowest proportion of Canadian teams.
C)Each team in the NHL generates greater revenue in terms of broadcasting rights than other leagues' teams.
D)The NHL is deeply rooted in Canadian identity.

Question 23

Which of the following does not predict attendance at a professional sporting even as well ?as the others?

A)market size of the home team
B)performance of the team in the last season
C)team performance in the last few games
D)higher ticket prices than last season

Question 24

A work stoppage in a professional sports league that involves the ownership not allowing the players to perform,even though they are willing,is referred to as a:

A)lockout
B)strike
C)cartel
D)collective bargain

Question 25

Which of the following is the best reason to bid on hosting the Olympic Games?

A)civic pride
B)improved transport links in the host city
C)a guaranteed tourism increase for many years
D)a cost/benefit analysis of past games reveals a financial benefit

Question 26

Which of the following would you explain to a friend is most likely to be referred to as a ?niche sport?

A)baseball
B)basketball
C)hockey
D)soccer