Problem
Assume that in the steel industry, given current production levels and technology, 1 machine costing $10,000 can replace 1 worker. Given current production levels and technology in the automobile industry, 1 machine costing $10,000 can replace 2 workers. Is this economy Pareto efficient; that is, is it on its production possibilities curve? If not, explain how total output of both goods can be increased by shifting machines and labor between industries.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.