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

Question

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When a nation exports a good or service, the domestic supply decreases, leading to a higher domestic price. This decrease in supply leads to a decrease in consumer surplus, as consumers have to pay a higher price for the good or service. However, producers benefit from the higher price, leading to an increase in producer surplus. Overall, total surplus increases if the increase in producer surplus is larger than the decrease in consumer surplus. However, if the increase in producer surplus is smaller than the decrease in consumer surplus, total surplus decreases. In general, when a nation exports a good or service, domestic consumers are worse off, domestic producers are better off, and the impact on total surplus depends on the relative magnitude of the changes in consumer and producer surplus.

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