Achieving input efficiency

Consider point a, the initial distribution of (LT and KT).
1.	Use the following information to compute the MRTS for firms i and j:
		Firm i Firm j MPL 160 16 MPK 10 8 MRTS
2.	Which firm has the greater productivity of labor compared to capital?
3.	What direction of trade will make both firms i and j better off?
4.	Diagram isoquants which reflect the situation faced by these two firms at point a. Label them Qai and Qaj.
5.	Now suppose that the two firms exchange 1L for 8K. Complete the following table:
		Firm i Firm j Amount of input gained (+) or lost (-) Amount of output gained or lost Amount of input gained (+) or lost (-) Amount of output gained or lost DL:         DK:         Net DQ  ---   ---
6.	Indicate in your diagram the direction the firms move from point a.
7.	a.	Diagram the highest attainable output for firm i if firm j produces Qaj. Label your new isoquant Qbi. Which output is higher, Qai or Qbi? ______
	b.	Diagram the highest attainable output for firm j if firm i produces Qai.  Label your new isoquant Qbj. Which output is higher, Qaj or Qbj? ______
8.	Draw a contract curve (CC) which includes the two production points you illustrated in part 8.
9.	The portion of a contract curve which can be reached via voluntary exchange from a given initial endowment is known as the "core" of the contract curve. Indicate the core determined by point a.