What Effect Does an Increase in Exports Have

question 125

Multiple Choice

What effect does an increase in exports have?

• A)It leads to an even larger increase in equilibrium income.
• B)It leads to an even larger decrease in equilibrium income.
• C)It leads to a smaller increase in equilibrium income.
• D)It leads to a smaller decrease in equilibrium income.

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Definitions:

Producer Surplus II

Represents the difference between what producers are willing to accept for a good or service versus what they actually receive, indicating the benefit to producers.

Consumer Surplus

The difference in consumer's payment expectation versus their actual expenditure on a good or service.

Demand Curve

A graph representing the relationship between the price of a good and the amount consumers are willing and able to purchase at various prices.

Producer Surplus

The difference between the actual price at which a producer sells a product and the minimum price they would be willing to accept, indicating producer gain.