1. In his meeting with the owner of the Oakland Athletics, Steve Schott, General Manager Billy Beane asks him for more money for payroll so that he can improve the team to compete with the teams with larger budgets - a request that Schott denies by saying, "We are a small market team and you are a small market GM. I am asking you to be ok not spending money that I don't have."

Explain Schott's position using the concepts of total cost, total revenue, and profit.

In his meeting with the owner of the Oakland Athletics, Steve Schott, General Manager Billy Beane asks him for more money for payroll so that he can improve the team to compete with the teams with larger budgets - a request that Schott denies by saying, "We are a small market team and you are a small market GM. I am asking you to be ok not spending money that I don't have." Explain Schott's position using the concepts of total cost, total revenue, and profit. In his meeting with Cleveland Indians GM, Mark Shapiro, Billy Beane discusses a trade for an outfielder named Garcia. After being told no on the original offer of starting pitcher Mark Guthrie for Garcia and $200k cash, Shapiro seems more interested in the counteroffer of Guthrie for Garcia without the cash kicker. Explain why Shapiro would be more interested in the second offer using the concepts of marginal cost and marginal benefit. In his high school playing days, Billy Beane had the option of taking a baseball scholarship to attend Stanford University or he could sign a contract with the New York Mets after being selected in the 1st round (23rd overall) of the MLB draft. Define the concept of opportunity cost. Then, identify what would be the opportunity cost that Billy would have if he accepted the scholarship to Stanford and what the opportunity cost would be if he signed with the Mets. In his meeting with scouts to fill holes in the roster created when they lost players as free agents, Billy mentions that the scouts are trying to replace the guys they lost. He says those played aren't replaceable, but they can be "recreated in the aggregate". Explain the difference between supply/demand and aggregate supply/aggregate demand