A. Short Answer (40 points total): Answer 2 of 3. 1. Consider a farmer with U(x, l) = axc - (1-1)2, where I represents leisure, xc represents a consump- tion good, and the individual has one unit of time that can be allocated to a combination of three possible uses: (1) leisure (1), (2) farm production (LF), (3) off-farm work (Ls). Farm production is characterized by Xp = ylog(L) where L is the total labor used on the farm and y > 0. Good x can be sold at price p or consumed directly, and the individual can also hire outside labor (LB) to work on the farm (such that L = LF + LB) or sell their own labor off of the farm (Ls) at wage rate w. You may assume interior solutions for this problem. (a) Derive the profit function and the cost function associated with the farm (and note the arguments associated with each function). Explain whether either function is homogeneous of a given degree in any or all of its arguments. Then, determine whether the farm production process exhibits decreasing returns to scale for at least some input levels