Q.2. (20 Points) In a small Alpine village, Gimmelwalg in Switzerland, there are n cow herd owners who hire cowhands to attend their herds to pastures in the high alps. Cowhands' hourly wage, w, is $20. The total kilograms of cheese produced, by all the herds of Gimmelwalg, y, follows the production function of S, y=S(h^)=62.52.5.h^2+20.h^. Individual share of total production is yi= hhi.S(h^) where i=1,,n. The price of Swiss cheese per kilogram is $10. 1 a. Calculate socially optimal total number of hours that all cowhands need to attend the herds of all owners in Gimmelwalg. Show all your calculations. b. Calculate the equilibrium number of hours, h, that each herd is at the pastures when each herd owner acts in their own interest to maximize their profit. Assume that the herd owners are identical. (i.e., the competitive market equilibrium). c. Compare the socially optimum and competitive equilibria and explain in few sentences why the difference arises. Q.2. (20 Points) In a small Alpine village, Gimmelwalg in Switzerland, there are n cow herd owners who hire cowhands to attend their herds to pastures in the high alps. Cowhands' hourly wage, w, is $20. The total kilograms of cheese produced, by all the herds of Gimmelwalg, y, follows the production function of S, y=S(h^)=62.52.5.h^2+20.h^. Individual share of total production is yi= hhi.S(h^) where i=1,,n. The price of Swiss cheese per kilogram is $10. 1 a. Calculate socially optimal total number of hours that all cowhands need to attend the herds of all owners in Gimmelwalg. Show all your calculations. b. Calculate the equilibrium number of hours, h, that each herd is at the pastures when each herd owner acts in their own interest to maximize their profit. Assume that the herd owners are identical. (i.e., the competitive market equilibrium). c. Compare the socially optimum and competitive equilibria and explain in few sentences why the difference arises