Problem 2 - Multinational firms Most firms in the apparel and footwear industries choose to outsource production to countries where labour is abundant (Southeast Asia, North Africa or the Caribbean). However, those firms do not integrate with their suppliers there. On the other hand, firms in many capital-intensive industries choose to integrate with their suppliers. 1. What could be some differences between the labour-intensive apparel and footware industries on the one hand and capital-intensive industries on the other hand that would explain these choices? 2. What do these choices imply for the extent of intra-firm trade across industries? That is, in what industries would a greater proportion of trade occur within firms