Here are some questions to help you review and prepare for the exams.In addition to these questions,you should look at the learning objectives for each lecture (provided on Sakai) and review the slides andproblem sets.Week 1 Review Questions•Use deductive reasoning to explain why ticket prices rise when a team hires a star player.Whyisn’t the rise in ticket prices due to the increase in payroll?•List the determinants of demand for tickets and explain how they affect the demand curve andthe market equilibrium.•Use deductive reasoning (i.e., economic theory) to explain the owner’s argument of how a salarycap will distribute talent within a league.•Evaluate the owner’s argument of how a salary cap will distribute talent by using inductivereasoning (i.e., empirical evidence).What information was used?What was concluded?did we use it to better understand the world around us?•Develop a deductive model which maps market size to team revenue, and, therefore, suggeststhat large market teams will have higher winning percentages.List the assumptions of themodel and list all steps of the process.•When given two demand curves, identify the ticket demand curve for the small market team andthe ticket demand curve for the large market team, and solve for the profit maximizing quantity,price, and total revenue earned by each team.•Understand how to use the t-statistic, standard error, and p-value to test for the statisticalsignificance of an estimated coefficient.•Define R-squared and explain what it measures.•List 2 reasons why the variation in relative payroll does not explain much of the variation inwinning percentage for 3 of the major North American pro leagues, i.e., why does our modelhave a low R-squared.Week 2 Review Questions•Calculate the standard error if provided with the estimated coefficient and t-statistic.•Calculate the t-statistic if provided with the estimated coefficient and standard error.•List and describe 5 key differences between N. American and European sports leagues.•Why doesn’t the multi-variate model, which controlled for point scored and points allowed,explain 100% of the variation in winning percentage?How