Reference no: EM13154219

1. A player earns $900,000 a year. The player's statistics indicate that his marginal product of terms of winning percentage is .02. For example, if this players joined a club that was playing 500 ball, ie winning half of its games, then the team's winning percentage would rise to 0.520.

How much must the marginal revenue of a win be for this player to be underpaid? Explain.

(Assume there are 100 games in a season.)

2. A baseball player earns $1,650,000 a year. Scully estimated that an increase by 1 in the number of games won raises revenues by $286,911. Explain to the general manager of this player's team how you would decide if the player was overpaid, underpaid, or paid the right amount

3. You estimated that an increase by 1 in the number of games won raises team revenues by $250,000. You have determined that each rebound per game increases games won by 0.4 and each point per game raises games won by 0.1. A basketball player is seeking a contract worth $750,000 a year. The player averages 5 rebounds and 20 points per game. Explain to the general manager of your team whether or not to sign the player.