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In General, for Any Two Countries, There Are Many Exchange

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In general, for any two countries, there are many exchange rates that will lead to gains from trade, based on comparative advantage.


Definitions:

Pollution

The occurrence or release of harmful or toxic materials into the environment.

External Costs

Costs that are not borne by the parties to a transaction but are imposed on others, such as pollution affecting non-participants.

Output

The amount of goods or services produced by a company, industry, or economy in a given period.

Marginal Social Benefit

The additional benefit to society from one more unit of a good or service being produced and consumed.

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