Question

It is common to hear comments like “Why do baseball players earn millions of dollars a year for their negligible contribution to society while major contributors—such as schoolteachers, police officers, firefighters, and ambulance drivers—earn barely enough to survive?” Can you offer an answer based on what was discussed in efficiency of factor markets?

Answer 1

Ans

The answer is quite simple. There are very very few talented baseball players who play at national or international level. Thus supply is short. Further there is risk involved in this job and thier carrier is short. Thus all these factors contribute to higher earnings for baseball players