Graphically demonstrate the inefficiency that occurs when sports teams produce external benefits. How will a subsidy remedy this problem?
In Chapter 2, we downplayed the idea that owners lose money. Can owners actually lose money? If so, can it make sense to subsidize money-losing owner? Graphically demonstrate this situation.
Why aren't wages a subsidy benefit?
(Chapter 10, question 6) List the problems that confront state and local governments if they are to collect portions of buyers' surpluses and external benefits to provide subsidies to team owners.