True/False Question and explain the reasons:

1.A firm has two variable factors of production (x, y) with a production function q(x,y) = x1/3 y 1/3. The price of output is p, the price of factor x is wx, and the price of factor y is wy. y is fixed and equal to 27 - Find the factor demand curves x*, y*, and the optimal consumption level q*.

2. Assuming fixed input prices, an increase in the price of the output will result in an increase in the profits of the firm.