A2 ECONOMICS: Guess Paper-4

[mariam_anwar]

Q.3
Discuss how far the GDP figure might be used to determine whether one country
has higher living standards than another. [25]

Ans ) GDP : The sum of all domestically produced goods and services, in one year. Domestic production does include any products exported and consumption does include any products imported.
GDP at market price = GDP + Taxes - subsidies
GDP at factor cost = GDP + subsidies - Taxes
GDP calculated taking PPP theory exchange rates into account.
Real GDP : It is taking inflation rate into account.
Implicit Deflator : GDP at current prices/ GDP at base year prices X 100
Uses of N.I : Comparing living standards overtime in an economy, A measure of Economic Growth and making international comparisons.

Limitations : GDP per head which takes into account changes in population is a better measure than GDP alone.
Secondly, GDP measures are a measure of material standard of living rather than the quality of life. If negative externalities are arising, working conditions are declining, working hours are increasing, crime rates are increasing, the quality of G&S are declining, then even if the monetary GDP is increasing , the economic welfare will fall and there will be no record of it .
thirdly,During a war output can rise due to ore military equipment being produced but the quality of life might fall.Likewise the recruitment of more poice force to cope with increased crime rates will increase nominal GDP but might result in a fall in economic welfare.
Fourthly , when making international comparisons a common unit of measurement is needed and most of the time the US$ is used . However unless the PPP theory is used to measure the economy exchange rate, The GDP value will be inaccurate.
And lastly even if a country is found to have a higher real GDP per head than another using PPP theory it does not mean that all citizens of other countries enjoy the same GDP Per haed.

 

[mariam_anwar]

Q.4
Airbus, a large aircraft manufacturing company, announced in 2007 that its goal
was to increase its $475 million research budget by 25 % in order to try to develop
a more environmentally friendly aircraft that had lower fuel consumption.

(a) Explain why Airbus is likely to be in an imperfect rather than a perfect market
structure. [10]

(b) Economics textbooks sometimes criticise firms in imperfect competition as being
against the public interest. What does this mean, and how far does the Airbus
announcement prove the textbooks wrong? [15]

(A)In this We will give brief explanation and characteristics of the two structures with diagram . we will also relate an Aircraft company with monopoly as monopoly can spend huge amount on research and development and likewise with the characteristics of monopoly we will relate the two ..
(B) again we will explain the market structure (only imperfect) with all diagrams .. to sum extent imperfect market structure works in favor of public interest will explain some of the benefits like they bring innovations inventions, give variety to consumers, can spend on R&D ... then on the other hand these also works against the interest of public as its main aim is to make profits and maximize this but will also mention that oligopoly firms also have other objectives as well and that's why they ignore social cost as they dont think that will be profitable to produce .. will also give other disadvantages too .. Most importantly will explain the deadweightloss with respective diagram ...

 

[mariam_anwar]

Sir where do I stand rite now ?? i am really tensed for my economics paper ... this time I had really worked hard and I am studying by myself all and had not taken coaching for economics too ...

 

[Qamar Baloch]

Ans ) GDP : The sum of all domestically produced goods and services, in one year. Domestic production does include any products exported and consumption does include any products imported.
GDP at market price = GDP + Taxes - subsidies
GDP at factor cost = GDP + subsidies - Taxes
GDP calculated taking PPP theory exchange rates into account.
Real GDP : It is taking inflation rate into account.
Implicit Deflator : GDP at current prices/ GDP at base year prices X 100
Uses of N.I : Comparing living standards overtime in an economy, A measure of Economic Growth and making international comparisons.

Limitations : GDP per head which takes into account changes in population is a better measure than GDP alone.
Secondly, GDP measures are a measure of material standard of living rather than the quality of life. If negative externalities are arising, working conditions are declining, working hours are increasing, crime rates are increasing, the quality of G&S are declining, then even if the monetary GDP is increasing , the economic welfare will fall and there will be no record of it .
thirdly,During a war output can rise due to ore military equipment being produced but the quality of life might fall.Likewise the recruitment of more poice force to cope with increased crime rates will increase nominal GDP but might result in a fall in economic welfare.
Fourthly , when making international comparisons a common unit of measurement is needed and most of the time the US$ is used . However unless the PPP theory is used to measure the economy exchange rate, The GDP value will be inaccurate.
And lastly even if a country is found to have a higher real GDP per head than another using PPP theory it does not mean that all citizens of other countries enjoy the same GDP Per haed.

Its a nice effort. But keep in mind you need not to explain or descibe market price and factor costs etc. Maximum define GDP and give its initial formula i.e C + I + G + (X - M). Then other details which you have written is good.

 

[Qamar Baloch]

(A)In this We will give brief explanation and characteristics of the two structures with diagram . we will also relate an Aircraft company with monopoly as monopoly can spend huge amount on research and development and likewise with the characteristics of monopoly we will relate the two ..
(B) again we will explain the market structure (only imperfect) with all diagrams .. to sum extent imperfect market structure works in favor of public interest will explain some of the benefits like they bring innovations inventions, give variety to consumers, can spend on R&D ... then on the other hand these also works against the interest of public as its main aim is to make profits and maximize this but will also mention that oligopoly firms also have other objectives as well and that's why they ignore social cost as they dont think that will be profitable to produce .. will also give other disadvantages too .. Most importantly will explain the deadweightloss with respective diagram ...

Good dear. You are on the right track. You need to add some information about oligopoly as airline are a few in number and are big companies so an be oligopoly.

 

[mariam_anwar]

Good dear. You are on the write track. You need to add some information about oligopoly as airline are a few in number and are big companies so an be oligopoly.

oh yes .. we can relate it to oligopoly too

 

[Sjs1993]

Q.3
Discuss how far the GDP figure might be used to determine whether one country
has higher living standards than another. [25]

Discuss GDP. Definition and formula (C+I+G+(X-M)).

Then write a bit about Real GDP per capita that it takes into concern inflation as well as population. However some serious problems underlie.

Problems with measuring gdp:
1. non marketed items
2. underground/hidden economy
3. public sector goods such as national defense are not included

Then write about how production is not a good indicator of standard of living:
1. Production not equal to consumption (exports do not benefit local consumers)
2. Quality of goods and services (quality can improve overtime with a fall in price- cars today give more utility yet are cheaper)
3. Externalities (pollution, ozone depletion etc lower the standard of living)
4. Distribution of income

Talk about the working of ALTERNATIVE MEASURES: MEW and HDI

Conclusion: While gdp measures serve well to determine the national output and general level of progress, they have limitations to serve as measures of welfare and standard of living. Hence, alternative measures such as MEW and HDI should also be considered while making comparisons overtime and across countries

 

[Qamar Baloch]

Discuss GDP. Definition and formula (C+I+G+(X-M)).

Then write a bit about Real GDP per capita that it takes into concern inflation as well as population. However some serious problems underlie.

Problems with measuring gdp:
1. non marketed items
2. underground/hidden economy
3. public sector goods such as national defense are not included

Then write about how production is not a good indicator of standard of living:
1. Production not equal to consumption (exports do not benefit local consumers)
2. Quality of goods and services (quality can improve overtime with a fall in price- cars today give more utility yet are cheaper)
3. Externalities (pollution, ozone depletion etc lower the standard of living)
4. Distribution of income

Talk about the working of ALTERNATIVE MEASURES: MEW and HDI

Conclusion: While gdp measures serve well to determine the national output and general level of progress, they have limitations to serve as measures of welfare and standard of living. Hence, alternative measures such as MEW and HDI should also be considered while making comparisons overtime and across countries

nice attempt. Keep your effort continued to get A* inshaallah. Its nice to see that you are taking into account the alternative measure of HDI, MEW, and NEW etc. Its very nice approach.

 

[Sjs1993]

nice attempt. Keep your effort continued to get A* inshaallah. Its nice to see that you are taking into account the alternative measure of HDI, MEW, and NEW etc. Its very nice approach.

Thank you, sir

 

[Qamar Baloch]

Thank you, sir

welcome dear

 

[Qamar Baloch]

Send your points for this question.
How many of you can solve it as it is a very common question asked by CIE most of the time.
Q.6
In 2009 there were huge fires in Australia which destroyed much property and
countryside.
The government promised to allocate a large amount of money and resources to
help with the restoration of the area.

(a) With the help of diagrams explain what is meant by efficiency in the use of
resources. [12]
(b) Discuss the economic implications of the government’s approach to the situation.
[13]

 

[Qamar Baloch]

Do you know about the completely solved past papers written by Qamar Baloch? If no then still you have time to get it for the best preparation of final exams. It is available with complete solution in Lahore, Islamabad, Faisalabad, Karachi, Jhang, and Multan at recommended book shops including burhani and education max at karachi, Iqbal, anees, and students resource at lahore. For any further information you may contact me at 03217555550. Thank you its the best opportunity with you to finally polish and check your concepts to get A* in this attempt.

 

[salmankhan00]

Do you know about the completely solved past papers written by Qamar Baloch? If no then still you have time to get it for the best preparation of final exams. It is available with complete solution in Lahore, Islamabad, Faisalabad, Karachi, Jhang, and Multan at recommended book shops including burhani and education max at karachi, Iqbal, anees, and students resource at lahore. For any further information you may contact me at 03217555550. Thank you its the best opportunity with you to finally polish and check your concepts to get A* in this attempt.

do ny1 ov u have any guess paper of eco, a/cs or business studies or any imp topics especially for a/cs

 

[mariam_anwar]

Sir please explain productive and allocative effieciency?

 

[hychristine]

Sir please explain productive and allocative effieciency?

on here:
http://www.xtremepapers.com/revisio...n_and_costs/an_introduction_to_efficiency.php

 

[MnMz]

Are those topics that are mentioned in the guess paper.....are they going to be 100% tested in the exam this friday??
And what are the important topics to focus on for this paper??

 

[Qamar Baloch]

do ny1 ov u have any guess paper of eco, a/cs or business studies or any imp topics especially for a/cs

Note: Guess means something predicted based on experience and evaluation skills. It can never be the actual keep it in mind. According to my speculation Examiner will ask the same questions but with different statements. But the same knowledge will be tested InshaAllah. Those who are very week in studies are advised to learn at least Q.1, 3 and 5. ​

V.V.V.V.V Important questions 1, 3 and 5. Don’t forget to revise them. I wish all of you best of luck!​

Section B​

1. In 2006 it was reported that a country’s unemployment rate had remained steady

and that its central bank, through its interest rate policy, had prevented an ​

increase in inflation despite a sharp rise in oil prices.​

​

(a) Explain what might cause unemployment. [12]​

(b) Discuss how interest rate policy might prevent a rise in inflation. [13]​

​

2. (a) Explain the factors influencing the level of investment in an economy. [10]​

(b) Discuss the extent to which national income is determined by private ​

investment. [15]​

​

3. Discuss how far the GDP figure might be used to determine whether one country ​

has higher living standards than another. [25]​

​

4 Airbus, a large aircraft manufacturing company, announced in 2007 that its goal ​

was to increase its $475 million research budget by 25 % in order to try to develop ​

a more environmentally friendly aircraft that had lower fuel consumption.​

​

(a) Explain why Airbus is likely to be in an imperfect rather than a perfect market ​

structure. [10]​

(b) Economics textbooks sometimes criticise firms in imperfect competition as being ​

against the public interest. What does this mean, and how far does the Airbus ​

announcement prove the textbooks wrong? [15]​

​

5. Discuss what might cause inequalities in wage rates in an economy. [25]​

​

6. In 2009 there were huge fires in Australia which destroyed much property and ​

countryside.​

The government promised to allocate a large amount of money and resources to ​

help with the restoration of the area.​

(a) With the help of diagrams explain what is meant by efficiency in the use of ​

resources. [12]​

(b) Discuss the economic implications of the government’s approach to the situation. ​

[13]​

​

7.
Most governments aim for full employment and stable prices. Which of those two aims should your government seek to achieve in the coming year and how might this choice affect the other aim? [25]

 

[Qamar Baloch]

Are those topics that are mentioned in the guess paper.....are they going to be 100% tested in the exam this friday??
And what are the important topics to focus on for this paper??

Wage theory, national income accounting, theory of income and employment, Market structure and economic efficiency, and government macroeconomic aims are very very important this time. Further, you can see the guess paper posted above to have an idea about important topics.

 

[MnMz]

Qamar Baloch

Sir for the question (b) Discuss how interest rate policy might prevent a rise in inflation. [13]
& 5. Discuss what might cause inequalities in wage rates in an economy. [25]

could you send me the answers for them =)

 

[Qamar Baloch]

Qamar Baloch

Sir for the question (b) Discuss how interest rate policy might prevent a rise in inflation. [13]
& 5. Discuss what might cause inequalities in wage rates in an economy. [25]

could you send me the answers for them =)

dear very good description for these questions is given in the same post by hychristine. Just check that. Thank you. If you are from Pakistan the hard copies are available for the same.