the world price of a good or service is below the equilibrium price of that good or service, the country being analyzed will (import, export) the good or service. As a result, consumer surplus (increases, decreases), and producer surplus (increases, decreases). Total surplus (increases, de

import

increases

decreases

unchanged

Explanation:

If the world price of a good or service is below the equilibrium price of that good or service, it means that the world is more efficient in the production of that good. So, the country being analysed should import the good.

If the country imports the good, prices would fall. As a result, consumer surplus increases and the producer surplus decreases. total surplus remains unchanged

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Total surplus = Consumer surplus + Producer surplus