The table below shows the average salary for major league baseball players in constant 2012 dollars (that is, after adjusting for inflation). As you can see, the average salary of $3,440,000 in 2012 is nearly 20 times larger than the average salary in 1970.
Year Average Salary*
1970 ……………... $173,397
1980 ……………... $408,198
1990 ……………...$1,035,515
2000 ……………...$2,649,988
2010 ……………...$3,472,326
2012 ……………...$3,440,000
* In constant 2012 dollars
a. Explain what economic forces will encourage ball players in 2012 to play an extra year compared to those in 1970?
b. Are there any economic reasons for ball players to retire earlier than those in 1970?