Questions 3 (Substitution between Factors of Inputs) Suppose that there are two tasks/sectors in the production function and each sector uses both labor and capital inputs. Then, produc- tion function can be expressed as follows. y = ATIT where 71 = min[a, high], where, 72 = k + low and capital is homogenous but labors in different sector/task are different by their skill-contents. 1. For given level of xo, and r = 2, Whigh =4, Wow = 1. Also assume that the cost of producing one unit of task is given as ry, and IT, for each task. Find ry and ry, . Graphicall find optimal bundle of tasks to produce given amount of final output x. And for each task, graphically find optimal bundle of inputs & and how as well as lhigh. 2. Now suppose r in reduced to r = 1/2 and wages remain the same, Whigh = 4, Wow = 1. Find ry and ry, . Graphicall find optimal bundle of tasks to produce given amount of final output x. And for each task, graphically find optimal bundle of inputs & and how as well as high- 3. How do the demands for k, low, and high change as the rental price of capital is reduced? 4. Also discuss workers with what skills will benefit most from AI technology advancement (i.e., reduced the price of capital). 5. In the Ist, 2nd, and 3rd industrial revolutions, how the labor displaced in one task could able to move to other task