Sweden has 400 workers and 600 machines. Italy has 400 workers and 400 machines. Factor requirements per unit of output are fixed as follows:

workers machines

Ball bearings

4 10

Shoes

6

5

Calculate each country's full employment output combination. Suppose that demand conditions are the same in both countries and that free trade leaves them at their full-employment output points. Which country will export shoes? Illustrate your answer using transformation curves and trade triangles.

Calculate each country's full employment output combination. Suppose that demand conditions are the same in both countries and that free trade leaves them at their full-employment output points. Which country will export shoes? Illustrate your answer using transformation curves and trade triangles