Foreign Service Officer Test (FSOT) Practice Exam

How do economists view ticket scalping?

1. As an illegitimate enterprise costing consumers excessively

2. As a legitimate and voluntary transaction by both parties

3. As having no consequence or importance

4. None of the above statements are true

The correct answer is: As a legitimate and voluntary transaction by both parties

Economists generally view ticket scalping as a legitimate and voluntary transaction between two parties, where both the seller and the buyer agree to the sale at a market-driven price. This perspective is rooted in the fundamental principles of supply and demand. Ticket scalping occurs when demand for tickets exceeds supply, allowing scalpers to sell tickets at a premium. This practice reflects market dynamics, as consumers who value the experience more than the original price are willing to pay more to secure their tickets. From an economic standpoint, this exchange can be seen as efficient as it allocates resources (in this case, tickets) to those who value them most highly. While there are concerns related to fairness and accessibility in ticket sales, these issues do not negate the economic rationale behind scalping. Thus, the view of scalping as a voluntary transaction underscores the broader understanding of market economies, where prices can fluctuate based on demand and availability, highlighting the principles of individual choice and market functionality.