Joe is self-employed in a store that has a rental value of $500 a month which he pays, but he can vacate the building without giving notice. His other expenses are $100 a month for maintenance. He makes $25,000 a year on net sales (total revenue minus the wholesale cost of the product). If he quit his job and worked the same number of hours elsewhere at a job he liked equally well, he estimates that he could make $20,000 a year. No one else can be hired to work in the store. Suppose that the store owner gave Joe the store. Now what should he do?

A. Work part-time.
B. Keep the job.
C. Quit his job.
D. It is impossible to say with the information given in the problem.


Answer: C

Economics

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Starting from equilibrium in the ISLM framework, an increase in money demand results in

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