Explain what is meant by exchange efficiency and discuss the conditions under which the market will give up exchange efficiency. In your explanation of exchange efficiency, you should discuss what slopes are relevant for exchange efficiency and how they are relevant. While I expect to see the equation for exchange efficiency as part of your answer, you are alos expected to explain the intuition behind the equation to demostrate you understand the economics. (Note: this is refered to as pareto efficiency in pure economy exchange.)