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Question: 01

A firm pays Rs. 450,000 in wages, Rs. 66,430 in interest on borrowedmoney capital and Rs. 89,320 for the yearly rental of its factory building. Ifthe entrepreneur worked for somebody else as a manager, he would earn atmost Rs. 58,400 per year and if he lent out his money capital to somebodyelse in a similarly risky business, he would at most receive Rs. 28,500 peryear. He owns no land or building. Keeping in view the above information,calculate the:

a) Explicit cost of the entrepreneur

b) Implicit cost of the entrepreneur


Question: 02

Given the following equations of total revenue and total cost:

TR = 250Q – 5Q2

TC = 100 + 50Q

Find out the level of output at which profit is maximized (by using marginalrevenue and marginal cost approach).


Question: 03

You have given the following information:Estimated regression line:

Y = 0.55 + 9.25X

Standard error = 0.75

Degree of freedom = 8

Level of significance = 5%

Tabulated value of t = 2.306

Calculate the confidence interval from this information.(Marks: 5)

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