Fetzer valves can be made in either China or the United States, but because labor in the United States is more skilled, on average, than labor in China, the production technologies differ. Consider the two production isoquants in the figure. Each represents either the production technology for the United States or for China. Based on the MRTS, which production isoquant is more likely to represent the United States and which represents China? Explain.

Transcribed Image Text:

Capital Q=1,000 -(Country B) Q= 1,000 Country A) 忏『 Labor (L)