Problem '7 [20pts] Computer chips are manufactured using labor and chip manufacturing machines. Let x1 denote the units of labor and x2 denote the number of machines. Let the production y = 0.75 0.25 x1 12 . 1. Does this production fmetion exhibit increasing, constant, or decreasing returns to scale? [O4pts] 2. Derive the conditional input demand functions. [Upts] 3. Derive the cost of production as a function of the number of computer chips, where the factor prices ml and w; are given. [05pts] 4. Now suppose that there are 4 machines in the short run. What is the firm's supply in the long run if computer chips sell for $50, $01 = 1 and W2 2 2? [05pts]