Topic C on Asymmetric Information: Question C1: Uncle Sam produces hay. He has a single employee John. If John works for x hours he can produce x bales of hay. Each bale of hay sells for $10. The cost to John of working x hours is c(x) = x2/5. (25 marks) (a) What is the efficient number of bales of hay for John to cut? (5 marks) (b) If the most that John could earn elsewhere is zero, how much would Uncle Sam have to pay to him to work the efficient amount? (5 marks) (c) What is Uncle Sam's net profit? (5 marks) (d) Suppose that John could receive $15 for passing out leaflets, an activity that involves no effort whatsoever. How much would he have to receive from Uncle Sam for producing the efficient number of bales of hay? (5 marks) (e) Suppose now that the opportunity for passing out leaflets is not available, and Uncle Sam decides to rent his hayfield out to John for a flat fee. How much would he rent it for