ECON2150 Midterm #2 Practice Questions with
Verified 100% Correct Answers
general equilibrium model - ✔✔An economic model that studies the behaviour of all
producers, consumers, and traders simultaneously.
partial equilibrium model - ✔✔An economic model of a single market
x of consumer #1 + x of consumer #2 - ✔✔what is the combined demand formula?
x of consumer #1 + x of consumer #2 - ✔✔what is the combined supply formula for
decreasing returns?
x of consumer #1 OR x of consumer #2 (whichever x is lower) - ✔✔what is the
combined supply formula for constant returns?
none because increasing returns have no supplys - ✔✔what is the combined supply
formula for increasing returns?
Pd = Ps + tax - ✔✔Tax formula?
xd = xs - ✔✔for a tax, what are the two equal variables?
A + B + E - ✔✔For a tax, what is the original CS?
C + D + F - ✔✔For a tax, what is the original PS?
, A - ✔✔For a tax, what is the new CS?
D - ✔✔For a tax, what is the new PS?
B + C - ✔✔For a tax, what is the GR?
E + F - ✔✔For a tax, what is the DWL?
Ps - ✔✔for a tax with constant returns, what remains constant?
A + B + C - ✔✔for a tax with constant returns, what is the original CS?
A - ✔✔for a tax with constant returns, what is the new CS?
B - ✔✔for a tax with constant returns, what is the GR?
C - ✔✔for a tax with constant returns, what is the DWL?
Pd = Ps - tax - ✔✔what is the formula for a subsidy?
A + B - ✔✔for a subsidy, what is the original CS?
C + D - ✔✔for a subsidy, what is the original PS?
Verified 100% Correct Answers
general equilibrium model - ✔✔An economic model that studies the behaviour of all
producers, consumers, and traders simultaneously.
partial equilibrium model - ✔✔An economic model of a single market
x of consumer #1 + x of consumer #2 - ✔✔what is the combined demand formula?
x of consumer #1 + x of consumer #2 - ✔✔what is the combined supply formula for
decreasing returns?
x of consumer #1 OR x of consumer #2 (whichever x is lower) - ✔✔what is the
combined supply formula for constant returns?
none because increasing returns have no supplys - ✔✔what is the combined supply
formula for increasing returns?
Pd = Ps + tax - ✔✔Tax formula?
xd = xs - ✔✔for a tax, what are the two equal variables?
A + B + E - ✔✔For a tax, what is the original CS?
C + D + F - ✔✔For a tax, what is the original PS?
, A - ✔✔For a tax, what is the new CS?
D - ✔✔For a tax, what is the new PS?
B + C - ✔✔For a tax, what is the GR?
E + F - ✔✔For a tax, what is the DWL?
Ps - ✔✔for a tax with constant returns, what remains constant?
A + B + C - ✔✔for a tax with constant returns, what is the original CS?
A - ✔✔for a tax with constant returns, what is the new CS?
B - ✔✔for a tax with constant returns, what is the GR?
C - ✔✔for a tax with constant returns, what is the DWL?
Pd = Ps - tax - ✔✔what is the formula for a subsidy?
A + B - ✔✔for a subsidy, what is the original CS?
C + D - ✔✔for a subsidy, what is the original PS?
