1. 5. The following table shows the average salary for major league baseball players. 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 1980

$173,397

$408,198 1990 2000

$1,035,515

$2,649,988 2010 2012

$3,472,326

$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 today’s ball players to retire earlier than those in 1970?