I. Joe, who has no skills, no job experience, and no alternative job, runs a shoeshine stand. Other shoeshine operators earn $10,000 a year. Joe pays rent of $2,000 a year, and his total revenue is $15,000 a year. Joe spent $1,000 on equipment and he used his credit card to buy it. The interest on a credit card balance is 20 percent a year. At the end of the year, Joe was offered $500 for his business and all its equipment. Calculate Joe's opportunity cost of production and economic profit.

II. Classify the effect of each of the following as (1) a change in the demand for fish or (2) a change in the quantity of fish demanded.

a. The government of Canada closes the Atlantic cod fishery. b. People buy less fish because of a rise in fish price.c. The Catholic Church relaxes its ban on eating meat on Fridays.

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d. The price of beef falls (assuming that beef is a substitute of fish). e. It is generally alleged that eating fish is better for one's health than eating meat.