On a graph, consumer surplus is the area above the equilibrium price and below the demand curve.

Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect an increase in foreign output (Y*) will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria

What will be an ideal response?

If a firm has no ability to select the price of its product, it:

a. will go out of business due to losses. b. is a price-maker. c. cannot maximize profit. d. has a horizontal individual demand curve.