If Reserve Clauses Were Outlawed in Major-League Baseball

question 36

Multiple Choice

If reserve clauses were outlawed in major-league baseball,

• A) major league teams would have less incentive to train minor league players.
• B) minor league players would be paid more.
• C) players in the major leagues would be paid less than their marginal product.
• D) players in the major leagues would be paid more than their marginal product.

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Definitions:

Contribution

An amount of money or assistance given to support a cause or for a common purpose.

Compounded Annually

The method of computing interest that includes the original principal amount and the interest accrued over prior periods each year.

Deferred Annuity

An annuity contract that delays payments until the investor elects to receive them, often until retirement.

Payments

Amounts of money paid by one party to another, either as part of a one-time transaction or in installments over time.