7. (30 points) Changing K/L ratios. a) (5 points) Draw an Edgeworth Box for country H where the production of X and Y utilize Capital (K) and Labor (L). Let X be the capital-intensive good, and Y be the labor intensive good. Sketch in an appropriate looking efficiency locus curve and identify two points along the curve, labeled As and As, with A: being the one closer to the origin for good X. You need not include isosquant curves. b) (5) Draw in lines representing K/L ratios for each industry at the points As and Az. This will be four lines total, label them k, k, 2, ky, kyz c) (5) Suppose the economy starts at point As. It then shifts production to Az. What change in world conditions could prompt such a change? d) (5) How have the K/L ratios changed in each industry