Question: Suppose that there are two industries, one producing X and the other producing Y, which each use both capital K and labor L in the production process. The marginal rate of technical substitution in the Y industry is MRTS =4K /3L and in the X industry is MRTS =7K /2L . Define pareto efficiency and Y X y y x x determine the relationship between the capital-labor ratios in the two industries when production is efficient. Draw the contract curve for efficient production and explain the relationship of the contract curve to the production possibilities frontier.