The sports pages are always filled with news of the latest b

The sports pages are always filled with news of the latest big contract an athlete has received. The following table shows the average price for major league baseball tickets for four years, the average player salary, and the consumer price index for those years Average Ticket Price Average Player for Major League Consumer Price Index Salary (millions of Baseball (Dollars) (1982 -1984 100 Year 1996 2001 2010 2815 11.32 17.64 26.74 28.94 dollars) $1.18 $2.26 $3.31 $4.25 156.9 18.1 237.0 Instructions: Enter your responses rounded to two decimal places and include a negative sign (G) where appropriate. a Calculate the real percentage increase in ticket prices form 1996 to 2001 2015 -% %. From 2001 to 2010 %. From 2010 to b) Calculate the rebi percentage increase in player salaries from 1996 to 2001 to 201ST-.7% %. From 2001 to 2010 %. From 2010 c) Between 1996 and 2010 total attendance at the major league baseball games grew from 60 million to 73 million, despite the increase in real ticket prices. Does this increase in attendance more likely represent a supply shift or a demand shift in the market for baseball tickets? Leftward shift of demand Leftward shift of supply Rightward shift of supply Rightward shift of demand

Solution

Real price of ticket in 1996 = 11.32*100/156.9 = $7.21

Real price of ticket in 2001 = 17.64*100/177.1 =$9.96

Real price of ticket in 2010 = 26.74*100/218.1 = $12.26

Real price of ticket in 2015 = 28.94*100/237 = $12.21

A.

Real % increase in ticket price (1996-2001) = (9.96-7.21)/7.21 = 38.14%

Real % increase in ticket price (2001-2010) = (12.26-9.96)/9.96 = 23.09%

Real % increase in ticket price (2010-2015) = (12.21-12.26)/12.26 = -.41%

B.

Real player salary in 1996 = 1.18*100/156.9 = $.752 M

Real player salary in 2001 = 2.26*100/177.1 = $1.276 M

Real player salary in 2010 = 3.31*100/218.1 = $1.518 M

Real player salary in 2015 = 4.25*100/237 = $1.793 M

Real % increase in salary (1996-2001) = (1.276-.752)/.752 = 69.68%

Real % increase in salary (2001-2010) = (1.518-1.276)/1.276 = 18.97%

Real % increase in salary (2010-2015) = (1.793-1.518)/1.518 = 18.12%

C.

Correct Answer:

D.

When there is a rightward shift in demand, then price and quantity both increases. It is the case in the given scenario.