1,a) Prove that profit maximization implies cost minimization but not vice versa.b) Consider the problem of maximizing profit Π= py - wl subject to the production function y = l^a, a?(0,1). Derive the profit function and confirm that Hotelling's lemma hold. Explain what happens if a = 1.
2, Long run average costs rise as output increases if and only if the production function is homogeneous of degree p?(0,1). True or false? Explain your answer.