Many professional sports teams operate under a salary cap. This means that teams typically have a fixed amount of money that they can spend on players' salaries - that is, a salary cap. This is true of the National Basketball Association (NBA), for example. Suppose that the NBA has a salary cap of $100 million dollars, and a team has $30 million available to sign new players. That is, $70 million has already been committed to player salaries. The team has two further possibilities: either sign a star player for $30 million, or sign two good, solid supporting players for $15 million each. Finally, what would be the opportunity cost of signing the star player, say, if there were no salary cap? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C d There is no opportunity cost $15 million $30 million $70 million Export Fullscreen
Many professional sports teams operate under a salary cap. This means that teams typically have a fixed amount of money that they can spend on players' salaries - that is, a salary cap. This is true of the National Basketball Association (NBA), for example. Suppose that the NBA has a salary cap of $100 million dollars, and a team has $30 million available to sign new players. That is, $70 million has already been committed to player salaries. The team has two further possibilities: either sign a star player for $30 million, or sign two good, solid supporting players for $15 million each. Finally, what would be the opportunity cost of signing the star player, say, if there were no salary cap? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C d There is no opportunity cost $15 million $30 million $70 million Export Fullscreen
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter12: The Supply Of And Demand For Productive Resources
Section: Chapter Questions
Problem 7CQ
Related questions
Question
Economics
![Many professional sports teams operate under a salary cap. This means that teams typically have a fixed
amount of money that they can spend on players' salaries - that is, a salary cap. This is true of the National
Basketball Association (NBA), for example. Suppose that the NBA has a salary cap of $100 million dollars, and
a team has $30 million available to sign new players. That is, $70 million has already been committed to
player salaries. The team has two further possibilities: either sign a star player for $30 million, or sign two
good, solid supporting players for $15 million each. Finally, what would be the opportunity cost of signing the
star player, say, if there were no salary cap?
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
C
d
There is no opportunity cost
$15 million
$30 million
$70 million
Export
Fullscreen](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F41a11f92-ec66-4681-9866-6ecb7ea598eb%2F4eaf6507-fb6e-4543-b9ef-71da41143f57%2Fwvdjuq9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Many professional sports teams operate under a salary cap. This means that teams typically have a fixed
amount of money that they can spend on players' salaries - that is, a salary cap. This is true of the National
Basketball Association (NBA), for example. Suppose that the NBA has a salary cap of $100 million dollars, and
a team has $30 million available to sign new players. That is, $70 million has already been committed to
player salaries. The team has two further possibilities: either sign a star player for $30 million, or sign two
good, solid supporting players for $15 million each. Finally, what would be the opportunity cost of signing the
star player, say, if there were no salary cap?
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
C
d
There is no opportunity cost
$15 million
$30 million
$70 million
Export
Fullscreen
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