1. If a city has at least one professional sports team: a) Why might it make more economic sense today for...

1. If a city has at least one professional sports team:
a) Why might it make more economic sense today for the NFL team’s stadium to be
located in a suburban area and the MLB team’s park to be located in downtown areas?
b) What are ‘positive externalities’ associated with those teams and identify two types of
such externalities.

4. Public financing of professional sports facilities:
a) What is the main way by which municipalities borrow money to invest in sports
facilities?
b) List and explain four different types of taxes cities have used to collect monies to pay
back their investment costs in a sports facility?
c) Identify a tax that is likely to have more of an impact on residents versus nonresidents.
d) What does it mean if any of your taxes in 4b are ‘voluntary’?
5. With a graph, show and explain the difference between a pricing strategy pursued by a
‘standard’ versus ‘all or nothing’ monopolist where the seller (i.e. team owner) is
attempting to get a buyer (i.e. the host city) to buy the team (i.e. Q = 1). Note which
strategy is likely to end up costing the buyer more money.