Macroeconomics: The Big Picture
Read this chapter and attempt the "Try It" exercises. Also, complete the concept problems and the numerical problems at the end of the chapter. In the first section of this chapter, you will read about the definition of Gross Domestic Product and some of the issues around measuring it. You will also learn about the 4 phases of the business cycle. As you will see, the economy goes through naturally alternating periods of economic growth and recession. You will review certain sections of this chapter later in the unit.
2. Price-Level Changes
Case in Point: Take Me Out to the Ball Game …
The cost of a trip to the old ball game rose 2% in 2011, according to Team Marketing Report, a Chicago-based newsletter. The report bases its estimate on its fan price index, whose market basket includes four adult average-priced tickets,
two small draft beers, four small soft drinks, four regular-sized hot dogs, parking for one car, two game programs, and two least expensive, adult-sized adjustable baseball caps. The average price of the market basket was $197.35 in 2011.
Team Marketing compiles the cost of the basket for each of major league baseball's 30 teams. According to this compilation, the Boston Red Sox was the most expensive team to watch in 2011; the Arizona Diamondbacks was the cheapest. The table
shows the cost of the fan price index market basket for 2011.
| Team | Basket Cost | Team | Basket Cost |
|---|---|---|---|
| Boston Red Sox | $339.01 | Baltimore Orioles | $174.10 |
| New York Yankees | $338.32 | Cleveland Indians | $170.96 |
| Chicago Cubs | $305.60 | Florida Marlins | $170.24 |
| Chicago White Sox | $258.68 | Atlanta Braves | $169.02 |
| New York Mets | $241.74 | Cincinnati Reds | $162.24 |
| Philadelphia Phillies | $240.66 | Colorado Rockies | $161.00 |
| Los Angeles Dodgers | $226.36 | Milwaukee Brewers | $160.40 |
| St. Louis Cardinals | $223.18 | Kansas City Royals | $159.80 |
| Houston Astros | $221.36 | Texas Rangers | $159.40 |
| Minnesota Twins | $213.16 | Tampa Bay Rays | $139.68 |
| Toronto Blue Jays | $212.68 | Los Angeles Angels | $129.50 |
| San Francisco Giants | $208.15 | Pittsburgh Pirates | $127.71 |
| Detroit Tigers | $207.28 | San Diego Padres | $125.81 |
| Washington Nationals | $196.34 | Arizona Diamondbacks | $120.96 |
| Seattle Mariners | $183.59 | ||
| Oakland Athletics | $178.09 | MLB Average | $197.35 |