Suppose there are two countries, North and South, and each can produce two goods, Steel and Cotton. The production technology in the two goods is given by the following table. In addition, the production of Steel results in large clouds of Black Smoke, a pollutant.

(Refer to figure)

a. What is the pattern of trade?

b. Suppose that the government of the North introduces abatement regulation, making it more expensive for producers to make Steel. The government of the North wants to fully eliminate the Black Smoke emissions in their country. How stringent should regulation be? (That is, what should it make the abatement-cost inclusive production technologies?)