A country opens up to trade and becomes an exporter of wheat. In the wheat market, consumer surplus will ________, producer surplus will ________, and total surplus will ________.

Question

Quizplus · Accepted Answer

When a country becomes an exporter of wheat, domestic producers benefit from higher prices on the world market, increasing producer surplus. However, domestic consumers face higher prices, reducing consumer surplus. Overall, total surplus increases due to the gains from trade.

A Country Opens Up to Trade and Becomes an Exporter