External respiration involves the exchange of o2 and co2 between the lungs and the environment the exchange of wastes through the skin the exchange of nutrients in the lungs the exchange of o2 and co2 within the cell

External respiration (correct answer) involves the exchange of oxygen and carbon dioxide within the environment.

The exchange of wastes through the skin is just called excretion by sweating. 

There is no exchange of nutrients that occur in the lungs but rather absorption of nutrients is the function of the gastrointestinal tract.

The exchange of oxygen and carbon dioxide within the cell is called cellular respiration and involves carrying oxygen from the blood to the cell then the cell uses it as the final electron acceptor in the electron transport chain. The metabolic wastes of the cell, primarily carbon dioxide, goes now to the bloodstream to be exchanged for oxygen in the lungs.