s11 hw3 - Sports Economics Homework #3 Due Wednesday, June...

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Sports Economics Homework #3 Due Wednesday, June 1 Please write your answers on a separate sheet. Make sure your answers are well-written and make sense even if the reader has not seen the question. 1) Assume the interest rate is 10%. a) Would you prefer a $500 gift today or a $540 gift next year? b) Would you prefer a $100 gift now or a $500 interest-free loan to be paid back in four years? c) You just won the lottery. You can collect $10,000,000 today or $2,000,000 over the next eight years beginning next year. Which option is better? Show your work. 2) Refer to the article from the New York Post printed below. a) Suppose trader Ray Bartoszek and investor Anthony Lanza are solely concerned with profits. Under what condition does it make sense for them to buy the Mets? b) Describe a reason Bartoszek and Lanza may want to buy the Mets if they are not concerned solely with profits. 3) Refer to the following articles and write a brief essay to answer the questions. Jamie McCourt Seeks Dodger Sale and Bankers Say Bidders Willing To Pay $1 Billion For The Los Angeles Dodgers ; Forbes Magazine ; January 12, 2011 http://www.google.com/hostednews/ap/article/ALeqM5gevUUAwqY8mIf_Vr8Xl9GaNMU_JA? docId=e052698410c9489b888192ababb143a5 http://blogs.forbes.com/mikeozanian/2011/01/12/bankers-say-bidders-willing-to-pay-1billion-for- the-los-angeles-dodgers/ What is vanity premium (i.e. ego premium)? Why does this increase the price of the team? Discuss how the monopoly power of the league, i.e. the league’s ability to restrict the number
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This note was uploaded on 05/31/2011 for the course ECON 330 taught by Professor Amberbrown during the Spring '11 term at Grand Valley State University.

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s11 hw3 - Sports Economics Homework #3 Due Wednesday, June...

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