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Macroeconomics 1st Edition by Campbell McConnell,Stanley Brue,Sean Flynn
Edition 1ISBN: 978-0077230975Macroeconomics 1st Edition by Campbell McConnell,Stanley Brue,Sean Flynn
Edition 1ISBN: 978-0077230975 Exercise 2
Indicate how each of the following might affect the data shown in the table and graph in Figure 2 of this appendix:
a. BTU's athletic director hires away the coach from a perennial champion.
b. An NBA team locates in the city where BTU plays.
c. BTU contracts to have all its home games televised.
a. BTU's athletic director hires away the coach from a perennial champion.
b. An NBA team locates in the city where BTU plays.
c. BTU contracts to have all its home games televised.
Explanation
Verified
Verified
The graph between the game attendance and price of the tickets illustrates a negative relationship between the two variables. As the price of tickets is increased, spectators experience a fall in their real willingness to pay. Hence they demand fewer tickets so that the price and game tickets are negatively related.
a)
In case the athlete director of the university decides to hire away a famous coach of perennial team, spectators can expect a quality game.
This would encourage more spectators to watch the game. Hence, the demand curve will shift out. This is shown in Figure 1.
As a result, the quantity demanded of tickets at each price in the table will now be higher. This can be shown by increasing the numbers in Attendance column.
b)
Here, a professional team has decided to locate itself in the city where BTU is situated. This implies that it will participates in games, leaving only fewer games for BTU. Hence, spectators will be able to buy only fewer tickets for BTU games.
This will discourage spectators to watch the game. One can expect that the demand curve will shift inwards to the left. This is shown in Figure 2.
The quantity demanded of tickets at each price in the table should be decreased. This can be shown by decreasing the numbers in Attendance column.
c)
When BTU decides to contract all the games broadcasted on television, there can be a discouragement to marginal consumers. They might decide to watch the game on television sets instead of watching them in the stadium. This discourages few spectators to watch the game. Therefore, the demand curve will shift inwards to the right showing a decrease in demand. This is shown in Figure 2.
The quantity demanded of tickets at each price in the table should be decreased now. This can be shown by decreasing the numbers in Attendance column.
a)
In case the athlete director of the university decides to hire away a famous coach of perennial team, spectators can expect a quality game.
This would encourage more spectators to watch the game. Hence, the demand curve will shift out. This is shown in Figure 1. As a result, the quantity demanded of tickets at each price in the table will now be higher. This can be shown by increasing the numbers in Attendance column.
b)
Here, a professional team has decided to locate itself in the city where BTU is situated. This implies that it will participates in games, leaving only fewer games for BTU. Hence, spectators will be able to buy only fewer tickets for BTU games.
This will discourage spectators to watch the game. One can expect that the demand curve will shift inwards to the left. This is shown in Figure 2. The quantity demanded of tickets at each price in the table should be decreased. This can be shown by decreasing the numbers in Attendance column.
c)
When BTU decides to contract all the games broadcasted on television, there can be a discouragement to marginal consumers. They might decide to watch the game on television sets instead of watching them in the stadium. This discourages few spectators to watch the game. Therefore, the demand curve will shift inwards to the right showing a decrease in demand. This is shown in Figure 2.
The quantity demanded of tickets at each price in the table should be decreased now. This can be shown by decreasing the numbers in Attendance column.
Macroeconomics 1st Edition by Campbell McConnell,Stanley Brue,Sean Flynn
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