3.(24) A country has only two inputs K and L, two firms and produces two goods X and Y. Currently, the allocation of inputs is NOT Pareto inefficient (it is an inefficient allocation). a. (2) For Pareto efficiency in production, what must be true about each firm's MRTS (slope of isoquant)? b. (2) In the graph below, with firm X's origin on the left and L on the x-axis, pick some point as the current inefficient allocation (the endowment point) of K and L, labeling it as point 1 and label the origin for X and Y. C. (3) Given it is an inefficient allocation, graph and label the isoquants (see your answer to a.). d. (3) Show the largest increase in X that can result from an efficient exchange. Label this point 2. (4) Graph the production possibilities frontier on the right with X on the x axis. Graph points 1, and 2 and the origin points for industry X and Y. (9) Show (explain) why if all firms face the same prices for all inputs, then there is Pareto efficiency in production 3.(24) A country has only two inputs K and L, two firms and produces two goods X and Y. Currently, the allocation of inputs is NOT Pareto inefficient (it is an inefficient allocation). a. (2) For Pareto efficiency in production, what must be true about each firm's MRTS (slope of isoquant)? b. (2) In the graph below, with firm X's origin on the left and L on the x-axis, pick some point as the current inefficient allocation (the endowment point) of K and L, labeling it as point 1 and label the origin for X and Y. C. (3) Given it is an inefficient allocation, graph and label the isoquants (see your answer to a.). d. (3) Show the largest increase in X that can result from an efficient exchange. Label this point 2. (4) Graph the production possibilities frontier on the right with X on the x axis. Graph points 1, and 2 and the origin points for industry X and Y. (9) Show (explain) why if all firms face the same prices for all inputs, then there is Pareto efficiency in production