how can I tell it where to search for the image

Answer 1

just specify the path to your image using the src attribute.
For example:
<img src="http://example.com/myimage.jpg" />
you can also use relative paths if the image is in your site directory.
For example, if the image is in the images folder, which is in the same folder as your webpage, use:
<img src="./images/myimage.jpg" />

Answer 2

Is it the folder you use instead of the image?