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In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.

In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.
Transcribed Image Text:In 1966, two of baseball's best pitchers, both playing for the Los Angeles Dodgers, formed a two-player union. They demanded a $1 million 3-year contract to be split equally. They eventually signed 1-year contracts of $125,000 for Koufax and $110,000 for Drysdale. A short time later, baseball players formed a union and won an end to the reserve clause, which forced a player to play for a team as long as the team wanted the player. In 2018, Kershaw, another outstanding Dodger pitcher, signed a $93 million 3-year deal. a. In 1966, the CPI was 32.5. In 2018, it had risen to 251.1. Calculate the value in 2018 dollars of the contracts signed by Koufax and Drysdale. Compare the three contracts (annualizing Kershaw's contract). b. How did the elimination of the reserve clause change the bargaining power of players? c. Speculate as to how the end of the reserve clause, a change in the rules of the game, might have influenced ticket prices.
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