Economics Answers

Why did hospitals borrow so much and load up their balance sheets with debt during the 1980s?

Is an insurance company more concerned about fixed capital or working capital? Does this make it easier or harder to finance rapid growth?

Do generic drugs replace or compete with brand-name drugs?

Are patents a cost or an asset?

Do patents raise or lower the productivity of research?

In order to meet new Homeland Security guidelines, the Eagles install new facial recognition technology that can instantly identify all patrons entering Lincoln Financial Field. Installing the new security system costs the team $150 million. Once installed, it is essentially costless to operate. Use the appropriate economic framework to derive the impact of installing this system on ticket prices to Eagles games.

Given that monopolies are bad, how is it possible that a monopoly baseball team taking over the monopoly broadcaster actually benefits the fans who watch the game on TV? Use an appropriate economic model.

Suppose the Phillies decide to charge 25 percent more per ticket for every home game against the New York Mets (who always attract a lot of fans from New York). Assume initially that the cost of “providing” a game against the Mets is no different than for any other team.

a. Is this price discrimination? If so, what form of price discrimination is it, and why is it that form of discrimination. If it not, why isn’t it price discrimination?
b. Suppose Mets fans are particularly rowdy, so the Phillies have to hire extra security for a Mets game. Assuming that the Phillies must pay $250,000 in extra security costs regardless of attendance, does your answer to (a) change? Why or why not?
c. Suppose the security costs rise by $10 for every fan admitted to a Mets game but by only $5 for every fan admitted to any other game. Does your answer to (a) change? Why or why not?

Why is the multiplier effect of the Los Angeles Kings likely to be greater than the multiplier effect of the Winnipeg Jets?