Economics KP PMS Paper I 2013

KHYBER PAKHTOON KHWA PUBLIC SERVICE COMMISSION

COMPETITIVE EXAMINATION FOR THE POSTS OF

PROVINCIAL MANAGEMENT SERVICE (BPS-17) 2013

ECONOMICS PAPER-I

TIME ALLOWED: THREE HOURS MAXIMUM MARKS: 100

Note: Attempt any FIVE question Please be brief and to the point. Support your answer through diagrams, examples and verbal arguments. All questions carry equal marks.

Q1: What is Price Elasticity of Demand? How it can be measured? What are the determinants of Price Elasticity of Demand?

Q2: Define income and substitution effects of a price change. Using Hickson method illustrate graphically the decomposition of substitution and income effects of change in price of a normal commodity

Q3: How a firm can be in Equilibrium under Perfect Competition in the Short Run?

Q4: How is a firm’s demand curve for a particular variable factor input constructed when there is (i) only one variable input, (ii) two variable inputs in the productivity process?

Q5: Define GDP. How will you measure it?

Q6: What is inflation? Distinguish between demand-pull inflation and cost-push inflation.

Q7: What are the transactions that are recorded in the current account and the capital account?

Q8: What are the equation of exchange and the velocity of circulation? What assumptions are necessary to make the equation of exchange the quantity theory of money?