2. Amaa received a job offer from a reputed company. The company agreed to pay a monthly salary of Rs. 55 000. But, she refused it because she wanted to start her own business. She used following resources owned by her in her business; Resource Lost income 04 machines 01 building Rs. 5,000 of rent per machine Rs. 10,000 building rent I Rs. 15,000 rent 2% monthly savings interest 01 vehicle Rs. 50,000 of savings Amaa's monthly expenses, as recorded in her financial records were as follows: Remuneration for employees Rs. 55 000 Material and others Rs. 35 000 Other expenses Rs. 55 000 Her monthly income was Rs. 475,000 1. II. Calculate the economic profit or loss of Amaa. (04 Marks) You as an economist, would you recommend her to expand her current business activities? Justify you answer. (03 Marks)

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms. if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise. fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise.