# Economics Punjab PMS Paper I 2009

PUNJAB PUBLIC SERVICE COMMISSION

COMBINED COMPETITIVIE EXAMINATION FOR RECRUITMENT TO
THE POSTS OF PROVINCIAL MANAGEMENT SERVICE. ETC. – 2009
PAPER ON : ECONOMICS (OPTIONAL)

PAPER I

TIME ALLOWED : THREE HOURS MAXIMUM MARKS: 100

NOTE:  Write Answers in English or Urdu.

SECTION — I

1 Define Elasticity. Distinguish between price elasticity and income elasticity. What is the importance of the concept of Elasticity of Demand? (4, 12)

2 Compare Monopolistic Competition with Perfect Competition and Monopoly. How is pnce determined under perfect competition and monopoly? (8, 8)

3 Distinguish between the Supply Curve of a firm and industry during the short-run and the long-run. Illustrate by diagrams. (8, 8)

4 Distinguish between Average cost and Marginal cost of production. Show how for a firm working under competition its MR= AR = Price. (4, 12)

5 Describe the properties of an Indifference Curve. Explain by Indifference Curves the following equation :- price effect = income effect + substitution effect (8, 8)

6 Explain Imperfect market structures of (a) Oligopoly (b) Cartels. How do the cartels operate’? (8, 8)

7 How is the price, quantity and income of an input (i.e. Factor) determined under different market structures ? (16)

SECTION – II

8

qd = 100 – 6 P
qs = 4 P
Solve the above given Market Model for equilibrium price and quantity. Make graphs. And find out elasticity of demand and supply at equilibrium price. (9, 9)

9 Explain and give examples of the followings :- (6, 6, 6)
(i) Equations and Identities (ii) Derivative and its application in Economics (iii) Variables and Constants

10 (a) Given the following market function :- (12, 6)
3qd + 4P = 240 where P x qd ≥ 0

(i) Find the quantity demanded if the price is Rs. 12/-
(ii) What would be the demand if the product is a free good?
(iii) What would happen to demand if price is decreased by Rs.3/-.

(b) Define a Relation and Function and point out the difference between the two.

551 Views