Consider two countries, Home and Foreign, both of which are able to produce two goods: good 1 and good 2, using the same technologies. The production of both goods uses capital and labor in fixed proportions. In particular, the units of each input needed to produce one unit of output are given by: capital labor good 1 1 9 good 2 11 1 Home is endowed with 950 units of capital and 520 units of labor available, whereas Foreign is endowed with 420 units of capital and 760 units of labor. Consumers like to consume both goods and have the same preferences in both countries. Assume that the relative demand for good 1 takes the form: D1/D2 = 1/(P1/P2) Assume that the countries are closed to trade. Assume that these two countries open to trade with each other. According to the Heckscher-Ohlin theorem the pattern of trade will be as follows: Home will export good 1 and import good 2 Foreign will export good 1 and import good 2 Home will export both goods Foreign will export both goods