Deck 34: Ticket Brokers and Ticket Scalping

Question 1

The better economic model for ticket sales by the promoter is

A)perfect competition.
B)oligopoly.
C)monopsony.
D)monopoly.

Answer 1

D

Question 2

Referring to Figure 34.1, the number of tickets that this promoter will choose to sell will Figure 34.1

A)sell out the facility.
B)be where the demand curve crosses the marginal cost curve.
C)be more than capacity.
D)will be such that there are many empty seats..

Answer 2

D

Question 3

Referring to Figure 34.4, the price that this promoter will choose will Figure 34.4

A)sell out the facility.
B)be where the demand curve crosses the marginal cost curve.
C)will be such that there are many empty seats.
D)sell out the facility and will be where the demand curve crosses the marginal cost curve.

Answer 3

C

Question 4

A promoter finds the optimal capacity where capacity is exactly Figure 34.4

A)where marginal revenue equals zero.
B)where marginal revenue crosses demand.
C)where marginal revenue cuts through the kink in the marginal cost.
D)where marginal revenue equals zero and where marginal revenue cuts through the kink in the marginal cost.

Question 5

Economists see a useful service being performed by ticket scalpers, in that they

A)lower the price to all consumers.
B)raise the price so promoters get more money.
C)adjust a price that a promoter has set too low.
D)adjust a price that a promoter has set too high.

Question 6

The substantive economic difference between ticket scalping and ticket brokering is that

A)scalping is more efficient.
B)brokering is more efficient.
C)scalping is immoral and brokering is not.
D)there is no substantive economic difference.

Question 7

The marginal cost curve used to model promoter sold tickets to an event is

A)u-shaped.
B)check-shaped.
C)L-shaped.
D)backward L-shaped.

Question 8

Referring to Figure 34.3, the price that this promoter will choose will Figure 34.3

A)sell out the facility.
B)be where the demand curve crosses the marginal cost curve.
C)will be such that there are many empty seats.
D)sell out the facility and will be where the demand curve crosses the marginal cost curve.

Question 9

The only real difference between what a scalper does and what a broker does is that

A)what a broker does is legal in places where what a scalper does is not.
B)what a scalper does is legal in places where what a broker does is not.
C)scalping is only selling tickets whereas brokering involves both buying and selling.
D)brokering is only selling tickets whereas scalping involves both buying and selling.

Question 10

Referring to Figure 34.2, the number of tickets that this promoter will choose to sell will Figure 34.2

A)sell out the facility.
B)be more than capacity.
C)will be such that there are many empty seats.
D)sell out the facility and will be more than capacity.

Question 11

Referring to Figure 34.2, the price that this promoter will choose will Figure 34.2

A)sell out the facility.
B)be where the demand curve crosses the marginal cost curve.
C)will be such that there are many empty seats.
D)sell out the facility and will be where the demand curve crosses the marginal cost curve.

Question 12

A flat marginal cost curve prior to capacity being reached suggests that the marginal cost of providing entrance to the 100^th person is

A)the same as that of the 1000^th person.
B)less than that of the 1000^th person.
C)greater than that of the 1000^th person.
D)unrelated to the marginal cost of the 1000^th person.

Question 13

A sellout that is profit maximizing, results from the promoter

A)setting a price that is the lowest price possible that sells out the facility.
B)setting a price that is the highest price possible that sells out the facility .
C)charging too little for the ticket.
D)charging too much for the ticket.

Question 14

Referring to Figure 34.4, the number of tickets that this promoter will choose to sell will Figure 34.4

A)sell out the facility.
B)be more than capacity.
C)will be such that there are many empty seats.
D)sell out the facility and will be more than capacity.

Question 15

Referring to Figure 34.3, the number of tickets that this promoter will choose to sell will Figure 34.3

A)sell out the facility
B)be more than capacity
C)will be such that there are many empty seats
D)sell out the facility and will be more than capacity.

Question 16

Fans who purchase their tickets from ticket scalpers are likely to

A)be much less wealthy than typical fans.
B)have many other uses of their time that they consider to be close substitutes for the event.
C)have had much less time to plan their attendance than typical fans.
D)all of the options are correct.

Question 17

Although it is illegal in some locations to re-sell a $100 ticket to an event for $200, it is seldom illegal

A)for a charity to raffle a $100 ticket in order to raise much more than $200 in donations.
B)for a business to offer a $100 ticket to favored clients and generate orders worth much more than $200.
C)for a travel agent to offer a $100 ticket with a $100 hotel room as a "package" for more than $200.
D)all of the options are correct.

Question 18

The profit maximizing promoter will

A)sell a number of tickets equal to the capacity of the facility regardless of the price.
B)sell less than the capacity of the facility regardless of price.
C)sell more than capacity regardless of price.
D)sell that number of tickets where the marginal cost equals the marginal revenue.

Question 19

At capacity, the marginal cost of providing another ticket is

A)the same as it was before capacity was reached.
B)just a bit higher than it was before capacity was reached.
C)very much higher than it was before capacity was reached.
D)less than it was before capacity was reached.

Question 20

Referring to Figure 34.1, the price that this promoter will choose will Figure 34.1

A)sell out the facility.
B)be where the demand curve crosses the marginal cost curve.
C)be less than the marginal revenue.
D)will be such that there are many empty seats.

Question 21

A promoter might charge less than the profit maximizing ticket price because

A)ticket profits are not everything, the total profit may be enhanced by on-site memorabilia sales.
B)the talent that they represent may wish to play to a full arena for their own ego.
C)the talent may want to create a reputation for charging fair price so as to get more fans in the future.
D)all of the options are correct.

Question 22

In Figure 34.5, the effect of a well-enforced anti-scalping law is to Figure 34.5

A)reduce the welfare of consumers and scalpers by GFB.
B)increase the welfare of consumers by ABC.
C)decrease the welfare of scalpers by AFGC.
D)increase the welfare of consumers and decrease the welfare of scalpers.

Question 23

If the Boston Red Sox were playing the Chicago Cubs in the World Series and fans were willing to pay three times the face-value price for tickets, economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 24

A promoter might charge less than the profit maximizing ticket price because

A)he believes his own "hype" about the demand for the event.
B)he knows that the cost of constructing the facility is a "sunk cost", and must be ignored.
C)the talent may want to create a reputation for charging fair price so as to get more in the future.
D)all of the options are correct.

Question 25

When ticket scalping is legal, economists insist that the market so created ensures that

A)the people who are willing to give up the most money will see the event.
B)the people who care the most in their hearts will see the event.
C)the promoter makes the most money possible.
D)the performers make the most money possible.

Question 26

Since there are long waiting lists for tickets to events that regularly occur (Duke basketball, the August NASCAR race in Bristol, Tennessee, etc.), a profit maximizing promoter might

A)increase seating.
B)lower ticket prices.
C)eliminate seating.
D)eliminate the event altogether.

Question 27

Since there are long waiting lists for tickets to events that regularly occur (Duke basketball, the August NASCAR race in Bristol, Tennessee, etc.), a profit maximizing promoter would

A)raise ticket prices.
B)lower ticket prices.
C)eliminate seating.
D)eliminate the event altogether.

Question 28

If scalping is defined as selling tickets for more than face value, outlawing scalping with perfect enforcement of the law will cause

A)a shortage.
B)a surplus.
C)sellouts.
D)sellouts not to exist.

Question 29

A promoter might charge less than the profit maximizing ticket price because

A)like most promoters, she has deeply-felt charitable instincts.
B)the talent that she represents may wish to play to a full arena for their own ego.
C)she knows that the facility has absolutely no alternative use on the day of the event.
D)all of the options are correct.

Question 30

The price of Super Bowl tickets sold by scalpers is likely to be

A)less than face value.
B)more than face value.
C)exactly face value.
D)independent of which teams are playing in the Super Bowl.

Question 31

If the New Orleans Saints were playing the Arizona Cardinals in the NFC final to determine who would play in the Super Bowl and their fans were willing to pay three times the face-value price for tickets, economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 32

The basic reason that your college's women's basketball tickets are rarely if ever scalped is because

A)sellouts are required for scalping to work and these games rarely sell out.
B)brokers/scalpers just have not yet hit your city.
C)no one would ever pay more than the face value for such a ticket.
D)women's basketball is exempt from the laws of supply and demand.

Question 33

Since the face value of a ticket is set well before the event, any increase in the demand for a ticket will Figure 34.5

A)increase the number of tickets generally available.
B)certainly increase the number of tickets that people will want to sell to scalpers.
C)certainly decrease the number of tickets that people will want to sell to scalpers.
D)increase the scalper's price of tickets.

Question 34

Suppose one of baseball's most controversial records - the Bonds' career home run record - were on the line. Tickets to the games leading up to breaking of the record might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 35

Suppose one of baseball's most ensuring records - the Pete Rose career hit total record - were on the line. Tickets to the games leading up to breaking of the record might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 36

Suppose one of baseball's most enduring records - the Dimaggio 56 game hit streak - were on the line. Tickets to the 57^th game might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 37

Suppose one of baseball's most controversial records - the Bonds' 72 home run season - were on the line. Tickets to the games leading up to breaking of the record might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 38

Once tickets have been sold by the promoter, the model that best explains the role of scalpers is the

A)monopoly model.
B)supply and demand model.
C)the aggregate supply and aggregate demand model.
D)the monopsony model.

Question 39

If the long-suffering Pittsburgh Pirates and Kansas City Royals were to meet in the World Series and their fans, realizing that another trip to the World Series would not some again for 50 years, were willing to pay three times the face-value price for tickets, economists would suggest that a scalping market would appear and it

A)would make all ticket holders and potential buys worse off.
B)would make all ticket holders and potential buys better off (or at least no worse off).
C)cause the price to fall below the face value.
D)cause the price to fall back to the face value.

Question 40

Demand for a "once-in-a-lifetime event" is likely to be

A)more elastic than a reoccurring one.
B)exactly as elastic as a reoccurring one.
C)less elastic that a reoccurring one.
D)perfectly elastic, because life is short.

Question 41

For a promoter to maximize profit, he will have to sell out the venue.

Question 42

The Indianapolis Motor Speedway hosts the Indianapolis 500, the Brickyard 400, in addition to other races. During their respective peaks, both events were sellouts. The 2009 through 2011 versions of the Brickyard 400 saw 100,000 or more empty seats. It would have been in that owner's best interest to

A)reduce ticket prices so that sellouts would resume.
B)spend money to reduce seating.
C)set the ticket price to where MC=MR which may mean that there would not be a sellout.
D)spend as much money on advertising as necessary to ensure a sellout.

Question 43

If you were going to contract a facility by removing 10% of the older seats, but the costs of providing ushers and other personnel to deal with the remaining seats was exactly the same (on a per seat basis)as it had been , the new MC curve would look like the previous one except that it would

A)no longer be a backward L but would be upward sloping once the old capacity was reached.
B)just shift to the right.
C)just shift to the left.
D)just shift up.

Question 44

A market for scalped tickets exists only because the ticket sales policies of the event promoter

A)failed to exploit every opportunity for mutually beneficial trade.
B)exploited more opportunities for mutually beneficial trade than actually existed.
C)created illusory opportunities for mutually beneficial trade.
D)were unjust and immoral.

Question 45

Under any definition there is no service that a scalper performs.

Question 46

Suppose, during the rapid expansion of NASCAR during the 1990s and 2000s, a racetrack owner kept expanding capacity to keep up with demand. Suppose further that fan interest in NASCAR diminished during the recession of 2007-2009. It would have been in that owner's best interest to

A)reduce ticket prices so that sellouts would resume.
B)spend money to reduce seating.
C)set the ticket price to where MC=MR which may mean that there would not be a sellout.
D)spend as much money on advertising as necessary to ensure a sellout.

Question 47

If you were going to expand a facility by adding 10% more seats, and the costs of providing ushers and other personnel to deal with the new seats was exactly the same (on a per seat basis)as the older portion of the facility, the new MC curve would look like the previous one except that it would

A)no longer be a backward L but would be upward sloping once the old capacity was reached.
B)just shift to the right.
C)just shift to the left.
D)just shift up.

Question 48

During the rapid expansion of NASCAR during the 1990s and 2000s, the Bristol Motor kept expanding capacity to keep up with demand. The August race became the 3^rd most attended sporting event in the world. The recession of 2007-2009 diminished fan interest in that race such that there were empty seats in 2010 and 2011. It would have been in that owner's best interest to

A)reduce ticket prices so that sellouts would resume.
B)spend money to reduce seating.
C)set the ticket price to where MC=MR which may mean that there would not be a sellout.
D)spend as much money on advertising as necessary to ensure a sellout.

Question 49

Suppose, during the rapid expansion of NASCAR during the 1990s and 2000s, a racetrack owner kept expanding capacity to keep up with demand. Suppose further that fan interest in NASCAR diminished during the recession of 2007-2009. It would have been in that owner's best interest to reduce ticket prices sufficient to maintain a sellout.

Question 50

The StubHub's secondary baseball ticket market is an attempt by the league

A)to capture profits made in the secondary market.
B)to extend its monopoly in the primary ticket market to the secondary market
C)to appear to charge lower ticket prices while effectively charging higher prices
D)all of these

Question 51

If scalpers were to charge exactly face value for tickets to a sold-out event, there would be

A)more tickets traded in the market for scalped tickets.
B)fewer tickets traded in the market for scalped tickets.
C)no tickets traded in the market for scalped tickets.
D)a scalped ticket available for every seat in the stadium.

Question 52

The NFL Ticket Exchange is an attempt by the NFL

A)to capture profits made in the secondary market.
B)to extend its monopoly in the primary ticket market to the secondary market
C)to appear to charge lower ticket prices while effectively charging higher prices
D)all of these

Question 53

The Fill-in-the-Blank State University women's basketball team plays its games in the same facility as the men's team. The seating capacity is therefore the same for each. A profit maximizing university would

A)set identical ticket prices for men's and women's teams based on what would sell out every game.
B)set ticket prices based on the quantity where MC=MR so that the profit to each is maximized.
C)set ticket prices based on the quantity where MC=MR but to average that price for men and women and charge the same.
D)set ticket prices based on the quantity where MC=MR for the men and give the tickets to the women's games away.

Question 54

If you were going to expand a facility by adding 10% more seats, but because of the location of those seats the costs of providing ushers and other personnel to deal with the new seats was rising (on a per seat basis)the new MC curve would look like the previous one except that it would

A)no longer be a backward L but would be upward sloping once the old capacity was reached.
B)just shift to the right.
C)just shift to the left.
D)just shift up.

Question 55

If scalpers were to charge exactly face value for tickets to a sold-out event, there would be

A)more tickets sold in the market for scalped tickets than buyers there want to buy.
B)exactly as many tickets sold in the market for scalped tickets as buyers there want to buy.
C)fewer tickets sold in the market for scalped tickets than buyers there want to buy.
D)a scalped ticket available for every seat in the stadium.

Question 56

The Indianapolis Motor Speedway hosts the Indianapolis 500, the Brickyard 400, in addition to other races. During their respective peaks, both events were sellouts. During the late-1990s, the Indianapolis 500 experienced a dry period with 100,000 or more empty seats. . It would have been in that owner's best interest to

A)reduce ticket prices so that sellouts would resume.
B)spend money to reduce seating.
C)set the ticket price to where MC=MR which may mean that there would not be a sellout.
D)spend as much money on advertising as necessary to ensure a sellout.

Question 57

If scalpers were to charge only face value for tickets to a sold-out event, there would be

A)a scalped ticket available for every seat in the stadium.
B)a higher price in the market for scalped tickets than the equilibrium price.
C)a price in the market for scalped tickets equal to the equilibrium price.
D)a lower price in the market for scalped tickets than the equilibrium price.

Question 58

The Ticketmaster-NBA collaborative is an attempt by the NBA

A)to capture profits made in the secondary market.
B)to extend its monopoly in the primary ticket market to the secondary market
C)to appear to charge lower ticket prices while effectively charging higher prices
D)all of these

Question 59

New Texas stadium was built with so that the team could sell "standing room only" tickets. People who buy these tickets can watch the game on televisions located around the facility or on catwalks that surround the stadium. Policing those fans (making sure they do not stand in the way of people who have seats is costly). In that case the MC curve would be

A)upward sloping.
B)a backward L.
C)a forward L.
D)downward sloping.

Question 60

Race tracks that are road courses (as opposed to ovals)where drivers turn both right and left have large grandstands near the start/finish line and smaller ones at the various turns and twists in the course. On a per seat basis, the costs of providing personnel in the grandstand are less than the costs of providing personnel to the smaller ones. In that case the MC curve would be

A)upward sloping.
B)a backward L.
C)a forward L.
D)downward sloping.