A competitive firm has a production function described as follows: y = Lu Ls "K1/3, where Lu, Ls, and A are unskilled labor, skilled labour. and capital, respectively. Suppose that in the short run this firm must use 27 units of capital but can vary its amounts of labor (skilled and unskilled) freely. (a) If the wages for the skilled and unskilled labors are wa and ws, and the price of output is p = $4, obtain firm's demands for Ly and L, in the short run? (b) Suppose the government decides to give subsidies of $s to firm for every Lu they hire. Examine the relative effects of this policy on the employmet of unskilled labour and skilled labour. (c) If the government, instead, decides to subsidize firms on a lump- sum basis. What will the relative effects be on the employmet of unskilled and unskilled labour