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PPSC · PMS Punjab 2022

Economics, Paper I

100 marks · 3 hours · 10 questions
This paper Economics · all yearsQ. 1 · Explain Opportunity Cost which may…Q. 2 · Briefly explain and differentiate between…Q. 3 · Explain Law of Demand in…Q. 4 · "The Law of Diminishing Return…Q. 5 · Explain efficiency and optimum output…Q. 6 · (Utilize AC, MC, AR &…Q. 7 · Draw constant elasticity Demand curve…Q. 8 · Given the following equation, calculate…Q. 9 · Given the following equation: Y-c(Y-t…Q. 10 · Differentiate between Function & Relation.…With this paper← 20212022 →
3 hours · questions hide until you reveal them

Part I

Q. 1
  1. (a)Explain Opportunity Cost which may help to make decision by individuals and firms to decide production and consumption. Use examples to clarify your point of view. [8]
  2. (b)Is there any linkage between Opportunity cost and scarcity? Explain with the help of Microeconomic principles. [7]
(15)
Q. 2
  1. (i)Briefly explain and differentiate between movement along the demand curve and shifting the demand curve. [8]
  2. (ii)How can bumper crop affect the supply of agricultural products and what will be resultant effect on market equilibrium? Explain with the help of diagram. [7]
(15)
Q. 3
  1. (a)Explain Law of Demand in case of Giffen goods. Draw and explain such demand curve. How such demand differ from derived demand? [8]
  2. (b)Explain income and substitution effect in case of Hicken Decomposition. In which type of commodities income effect will dominate substitution effect. [7]
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Q. 4
  1. (i)"The Law of Diminishing Return is only one phase of the universal law of variable proportions". Explain. [10]
  2. (ii)What is a production function? How does a long-run production function differ from a short- run production function? [5]
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Q. 5
  1. (a)Explain efficiency and optimum output under Monopoly; Are there any production losses? [8]
  2. (b)Explain Demand Curve under Duopoly. How it differs from Monopoly? Do you think production is efficient in this case, as compared to (a) above. [7]
(15)
Q. 6

(Utilize AC, MC, AR & MR etc. curves). How AR is related to Demand?

  1. (a)Analyze income effect for hiring factors of production (FoP), as a result of price change of (FOP). [8]
  2. (b)Also discuss Scale expansion path due to changes in such prices. [7]
(15)

Part II

Q. 7
  1. (a)Draw constant elasticity Demand curve and explain demand elasticity along the curve. [8]
  2. (b)How this demand curve is different from the demand curve having constant elasticity demand curve? (Draw graphs to explain). [7]
(15)
Q. 8

Given the following equation, calculate simple multiplier and interpret the result. I+G = Y-c(Y-t) = s (Y-t) +t Calculate spending multiplier, given the following information. Y=GNP I =Investment t= tax rate =0.2 s= saving rate =0.2 c = MPC=0.7 c` = MPS=0.2, t=tax rate; constant

(20)
Q. 9

Given the following equation: Y-c(Y-t (Y)) + G + I(r) Where: I= Investment r= interest rate Y= GNP t= tax rate G= Govt. Spending; Constant Solve for dY/dr and draw "IS" curve ; based upon the slope of " IS" i.e. of I(r). Also draw graph of "IS" and interpret its Economic implications; slope and market equilibrium.

(20)
Q. 10
  1. (i)Differentiate between Function & Relation. Explain your answer by using examples. [6]
  2. (ii)Given: Y = c + lo + Go c = 25+6y Io = 16 Go = 14 Find (i) Y and C (ii) Value of multiplier [14]
(20)

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The 2022 PMS Punjab Economics paper set by the PPSC. Question wording only; questions marked “Not yet checked” have not been compared with the official paper yet.

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