Zach Greinke's marginal product as a baseball player would be about the same as a Los Angeles Dodger and a Kansas City Royal. Why were the Dodgers willing to pay Greinke a higher salary than he was paid as a Royal?
A) The Dodgers needed a superstar to attract fans to their games. The Royals had no need to attract fans to their games.
B) The owner of the Dodgers was under more pressure from the fans and the Los Angeles media to pay Greinke a higher salary than the Royals were willing to pay.
C) The Dodgers play more home games than the Royals. As a result, the Dodgers earn more revenue from ticket sales that they can use to pay player salaries.
D) Greinke's marginal revenue product is higher as a Dodger than it was as a Royal.
Question 2
If, in a closed economy, real GDP is 30 billion, consumption is 20 billion, and government purchases are 5 billion, what is total saving in the economy?
A) 5 billion B) 15 billion C) 45 billion D) 55 billion
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