1. A rm uses skilled {S} and unskilled [U] labour to produoe output {Q}. The rm's production function is given by so, 3} = Mw + 43 where U denotes unskilled labour and S denetm skilled labour. Assume U 2 and S 3 I]. Let my = '5 and tug = 3 denote the prioes of unskilled labour and skilled labour respectively. {a} [.5 marks] Suppose (U, S} = [3, 5). How much output dom the rm produce? 'What is the total cost of producing that level of output? {h} [1.5 marks] Let QB and Cu respectively denote the value of output and total costs oh tained in part {a}. The rm hires you as a consultant. They are not particularly interested in costcutting but they are averse to costincrease as well. Your task is to nd out the max imum level of output (E?) that can he produoed with a spending cap of CD and recommend the lovels of unskilled (IF) and skilled labour [5") necessary to produce (22*. Find Q", U', Md 31" P' .' HT