When a nation exports a good or service, the nation's consumer surplus ________, its producer surplus ________, and its total surplus ________.

Question

Quizplus · Accepted Answer

When a nation exports a good or service, its consumer surplus decreases because domestic consumers now face higher prices due to some of the domestic supply being sold abroad. Producer surplus increases because producers can sell at higher prices on the international market. Total surplus increases because the gains to producers from higher prices outweigh the losses to consumers, and the economy benefits from more efficient resource allocation.

When a Nation Exports a Good or Service, the Nation's