Economic Studies Have Generally Found That Professional Sports Players Have

question 17

Multiple Choice

Economic studies have generally found that professional sports players have salaries that

• A) greatly exceed their marginal contribution to a team's revenue stream.
• B) are approximately equal to their marginal revenue products.
• C) are about one-half of what they contribute to a team's profitability.
• D) are less than one-tenth of their marginal revenue products.

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Definitions:

Wages and Salaries

Payments made to employees in exchange for their labor or services, categorized as either hourly (wages) or fixed annual amounts (salaries).

Cash and Cash Equivalents

Liquid assets that include currency, checks, and short-term investments that can be quickly converted to cash.

Net Income

Net income is the total profit remaining after all expenses, taxes, and costs have been subtracted from total revenues.

Equity

The value of an owner's interest in a property or business, calculated as the difference between the assets and liabilities.