advocate Nirmal Sharma is running law practice individually. He has invested 3 lakh rupees of his own as capital and has also borrowed 1 lakh rupees from a bank ay an interest rate of 8% per annum. He has recently hired a typist at a monthly salary of 8000 rupees. The estimated monthly rental value of his own land he is using as an office is 30 thousand rupees. Calculate the total cost incurred by Advocate Nirmal Sharma, further subdivide it into implicit and explicit cost. It is also known that the imputed value of his services is 6 lakh rupees.

To calculate the total cost incurred by Advocate Nirmal Sharma, we need to consider both his explicit and implicit costs.

Explicit costs are the direct out-of-pocket expenses for running his law practice. These include:

1. The interest on the loan from the bank: 1 lakh rupees * 8% = 8,000 rupees per annum or about 667 rupees per month.
2. The salary of the typist: 8,000 rupees per month.

So, the total explicit cost per month is 8,000 rupees (typist's salary) + 667 rupees (interest on loan) = 8,667 rupees.

Implicit costs are the opportunity costs of using resources already owned by the individual. These include:

1. The opportunity cost of the capital he invested: This is the interest he could have earned if he had invested this money elsewhere. However, without a specified rate of return, we cannot calculate this cost.
2. The opportunity cost of using his own land as an office: This is the rent he could have earned if he had rented out the land. This is given as 30,000 rupees per month.
3. The imputed value of his services: This is the income he could have earned if he had offered his services elsewhere. This is given as 6 lakh rupees per annum or 50,000 rupees per month.

So, the total implicit cost per month is 30,000 rupees (rental value of land) + 50,000 rupees (imputed value of services) = 80,000 rupees.

Therefore, the total cost incurred by Advocate Nirmal Sharma per month is 8,667 rupees (explicit cost) + 80,000 rupees (implicit cost) = 88,667 rupees.