5.3 (5 points) What is the total consumer surplus when the Patriots adopt the 3d degree price discrimination (segmented markets) and maximizes their profit? Explain.6. (20 points) 6.1 (5 points) Explain why player contracts affect the ticket pricing. 6.2 (5 points) Explain why when a new team moves into an existing team's territory the ticket price of the existing team decreases. Use a graph to explain this.6.3 (5 point) Explain why indifference curves cannot be thick. 6.4 (5 points) Explain why teams do not always charge monopoly prices in the ticket market.Q7. (10 points) Short answer questions Q7.1) (2 points) Is the following statement true or false? Under perfect competition, firms have market power. Q7.2) (2 points) Is the following statement true or false? Revenue transfers exist to increase financial balance. Q7.3) (2 points) Is the following statement true or false? When the sports teams are adopting the 1$ degree price discrimination (perfectly price discriminate), deadweight loss is equal to zero. Q7.4) (2 points) Name two main revenue sources for sports teams.1. (15 points) The table presents the stats of three players in Texas Rangers. Assume that Shin Soo Choo had 15 starts in the past season. Player Runs Sacrificed (ERA) Runs Produced Shin Soo Choo 4.00 per game 55 per season Jesse Chavez 4.40 per game Elvis Andrus 48 per season 1.1 (5 points) Does Shin Soo Choo have an absolute advantage on pitching or hitting (or both)? Explain. 1.2 (5 points) What is the opportunity cost of Texas Ranger using Shin Soo Choo as a pitcher?1.3 (5 points) Does Shin Soo Choo have a comparative advantage on pitching or hitting? Explain.2. (15 points) A firm is selling its product in a perfectly competitive market. 2.1 (5 points) Fill in the table, so that there are no empty cells. Total Total Total Quantity Marginal Marginal Revenue Cost Profit Revenue Cost 0 0 60 50 75 2 102 134 4 175 224 6 284 359 8 4472.2 (5 points) At what price and output level will the firm above maximize its profit? Explain. 2.3 (5 points) Assume there is a price floor at $11 in the market. Is this a binding or non- binding price floor? Explain by drawing a graph.Q3. (10 points) The ticket price for the University of Arizona Wildcats football games increased from $30 to $60. After the price change, the attendance of the game decreased by 1,000. Originally, there were 4,000 fans that attended a game. Q3.1) (5 points) What is the elasticity of the demand curve of Wildcat's football games? Explain. Q3.2) (5 points) Based on the elasticity of demand, when the price increases 20% how much will the attendance decrease by? Explain.4. (15 points) We are interested in Sam's consumer behavior. Sam in considering two goods to buy: Hotdogs, and game tickets. The price of a hotdog is $1 (per hotdog), and the price of a game ticket is $5 (per game). Sam has $24 income. 4.1 (5 points) Fill in the table, so that there are no empty cells. (MU means marginal utility) Hotdog Total Marginal MU Game Total Marginal MU Game consumed Utility of Utility of Hotdog / consumed Utility of Utility of / Price Hotdog Hotdog Price Game Game Game Hotdog 10 150 2 19 2 250 3 27 3 325 4 33 4 355 5 38 5 360 6 41 6 360 7 42 7 3504.2 (5 points) How many hotdogs and game tickets should Sam buy to maximize his utility but do not go over his budget constraint? Explain. 4.3 (5 points) What is Sam's utility level when he is maximizing his utility under his budget constraint? Explain.5. (15 points) Consider a game ticket market of New England Patriots. The demand curve of the adults is P(Q) = 10,000 - 20. The demand curve of the students is P(Q) = 5,000 - Q. The stadium capacity of the Gillette Stadium is 20,000. Suppose New England Patriots is maximizing profit. The Patriots is adopting the 3"d degree price discrimination, segmented markets. 5.1 (5 points) What is the optimal adult price when the Patriots are maximizing its profit? Explain. 5.2 (5 points) What is the optimal student price when the Patriots are maximizing its profit? Explain