PUNJAB PUBLIC SERVICE COMMISSION
Combined Competitive Examination (CCE) 2023
For Recruitment to the Posts of Provincial Management Service (PMS)
SUBJECT: Economics (Paper-1)
Time Allowed: 3 Hours
Maximum Marks: 100
SECTION – A
PAPER – I
NOTE:
i. All parts (if any) of each question must be attempted at one place instead of at different places.
ii. Write Q. No. in the Answer Book in accordance with Q. No. in the Question Paper.
iii. No page/space should be left blank between answers. All blank pages must be crossed.
PART – I
Q. No. 1
(a) Explain opportunity cost which helps individuals and firms in decision making regarding production and consumption. Use examples to clarify your point of view.
(b) Is there any linkage between opportunity cost and utility? Explain with microeconomic principles.
(8 + 8 = 16 Marks)
Q. No. 2
(a) Briefly explain and differentiate between movement along the demand curve and shift in demand curve.
(b) How can bumper crop affect supply of agricultural products and what will be the resultant effect on market equilibrium? Explain with diagram.
(8 + 7 = 15 Marks)
Q. No. 3
(a) Explain Law of Demand in case of Giffen goods. Draw and explain such demand curve. How does it differ from derived demand?
(b) Explain income and substitution effect in case of Hicksian decomposition. In which types of commodities does income effect dominate substitution effect?
(8 + 7 = 15 Marks)
Q. No. 4
(a) “The Law of Diminishing Returns is only one phase of the universal law of variable proportions.” Explain.
(b) What is a production function? How does long-run production function differ from short-run production function?
(10 + 5 = 15 Marks)
Q. No. 5
(a) Explain efficiency and optimum output under monopoly. Are there any production losses?
(b) Explain demand curve under duopoly. How does it differ from monopoly? Discuss efficiency using AC, MC, AR, and MR curves. How is AR related to demand?
(8 + 7 = 15 Marks)
Q. No. 6
(a) Analyze income effect for hiring factors of production (FOP) due to price change.
(b) Discuss scale expansion path due to changes in factor prices.
(8 + 7 = 15 Marks)
Q. No. 7
(a) Draw constant elasticity demand curve and explain demand elasticity along the curve.
(b) How does this demand differ in various forms of constant elasticity demand curve?
(8 + 7 = 15 Marks)
PART – II
Q. No. 8
Given the following equation, calculate simple multiplier and interpret the result.
C = Y − c(Y + t) = s(Y + t) + I
Calculate spending multiplier given:
Y = GNP, I = investment, t = tax rate = 0.2, s = saving rate = 0.2, C = MPC = 0.7
(20 Marks)
Q. No. 9
Given:
Y = C + I + G
I = I(r), G = government spending
Analyze IS curve based on slope of I(r). Draw IS curve and interpret its economic implications and equilibrium.
(20 Marks)
Q. No. 10
Differentiate between function and relation with examples.
Given:
Y = C + I₀ + G₀
C = 25 + 0.6Y
I₀ = 16
G₀ = 14
Find:
(i) Y and C
(ii) Value of multiplier
(20 Marks)
SUBJECT: Economics (Paper-II)
Time Allowed: 3 Hours
Maximum Marks: 100
SECTION – A
Q. No. 1
Differentiate the following concepts:
a) Gross National Product (GNP) and Net National Product (NNP)
b) Gross Domestic Product (GDP) and National Income
c) Personal Income and Disposable Personal Income
d) Nominal GDP and Real GDP
Q. No. 2
Explain unemployment, its different types and causes. Also explain the remedial measures of unemployment.
Q. No. 3
Keeping in view IS-LM model, explain:
(i) Why IS curve slopes downward
(ii) Why LM curve slopes upward
(20 Marks)
Q. No. 4
How do life cycle and permanent income hypothesis resolve the seemingly contradictory pieces of evidence regarding consumption behavior?
SECTION – B
Q. No. 5
What are the determinants of economic development? How far do they exist in Pakistan?
(20 Marks)
Q. No. 6
What is meant by devaluation? Discuss its impact on the economy of Pakistan.
(20 Marks)
Q. No. 7
Is foreign debt good for Pakistan? Discuss advantages and disadvantages.
(20 Marks)
Q. No. 8
Define inflation. Explain demand-pull inflation and cost-push inflation with diagrams.
(20 Marks)
×