Question 2. Two individuals work on projects. Individual 1 expends e'nrt el and Individual 1 expends effort 32. These effort levels result in payoffs: 1 \"If-31:62}: {1&1 + be: + dew; ice? 1 2 \"2(31: 62} - 1122 + tel - Egg? The parameters, .1, h, c and d are positive 1with c '3:- d. 1. Find the best response functions for each of the individuals and plot them on a. graph. These have the form cl = bez} and c2 = b2 {61}, giving 31 as a function of 2 and 32 as a function of 31. (Note that c2 = b-zfel} has a simple form.) 2. Find the Nash equilibrium levels, cf and e; of el and c2. 3. The socially optimal levels, {shah} of El and c2 maximise [Jr-{1,122} = n1{31,s2}+ ugfehcg]. Find the socially optimal levels, .351 and g. 4. Show that a; c: fag