What is meant by 'production possibility frontier? What factors determine the production possibility frontier of an economy? How are the points below and above the production possibility frontier different from the points on the frontier curve?
Illustrate the difference between the Hicksian and Slutsky methods of separating income and substitution effects of price change of a normal good. Which method gives, in your opinion, a better measure of the two effects and why?
What are the conditions for least cost combination of inputs? Show, the maximization of output with the help of isocosts and isoquants at a given total cost.
What is the foundation of the modern theory of cost? How do you think modern theory explains the firm's behavior more accurately than the traditional theory of cost?
Explain the short-run equilibrium of a competitive firm. When would a competitive firm close down its business in the short-run?
What are the necessary conditions of price discrimination under monopoly? Show how a profit maximizing discriminating monopolist allocate his output between two markets and charge different prices?
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The 2017 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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