Answer to Question #48154 in Economics for Debra Boyles

Question

I need to relate the concept of the circular flow diagram into the world of Major League Baseball

Answer 1

As any baseball fan can tell you, the New York Yankees have won three of the last four World Series championships. The Yankees' recent success--as well as the success of other big market, high revenue teams--has led many to question whether smaller market teams can compete in Major League Baseball (MLB). In fact, in 1999, the Yankees had revenues of $176 million.
The circular flow diagram illustrates the interdependence of the “flows,” or activities, that occur in the economy, such as the production of goods and services (or the “output” of the economy) and the income generated from that production. The circular flow also illustrates the equality between the income earned from production and the value of goods and services produced.