Clemson University, Department of Economics Spring 2022 ECON 4120 Professor Cheng Chen Problem Set 2 Due Feb./10/2022 (Thu.) at 1 1am Please submit your solution via Canvas. Question 1: Assume that Kx=4 and KY=9 and L=10. Draw the PPF using the following production functions: X = (Kx LX) 0.5 Y = (Ky Ly)0.5 Why is the PPF an ellipse?Question 2: Use the following information to answer the question below, Computers: Sales Revenues = Pc x Qc= 150 Payments to Labor =W x Lc = 75 Payments to Capital = I'k x K= 75 Barley: Sales Revenues =Pb x Qb=150 Payments to Labor=W x Lb=70 Payments to Land= IT x KT= 80 Holding the price of computers constant, suppose the percentage increase in the price of barley is 10% and the increase in the wage rate is 5% a. Determine the impact on the price of land rental. b. Determine the impact on the price of capital rental. c. Determine the real welfare effects for each factor