Pakistan Institute of Development Economics, Islamabad

Sample Admission Test 2019

(MPhil Public Policy; Environmental Economics; Development
Studies and Health Economics)
Please read the instructions carefully before starting the test.

1. Fill out application ID number, name and father’s name on the title page.
2. Do not forget to sign the admission sheet available in the exam room.
3. Read the question carefully and choose the best answer for each question.
4. No cutting or overwriting please.
5. All questions are compulsory and there is No negative marking.

Maximum Time: 75 Minutes

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Name: _______________________________ Father’s Name: ___________________________

Signature of the Applicant: ________________________________

For Office Use

Maximum Marks: _______50______________________

Marks Obtained: _______________________________

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 GENERAL APTITUDE TEST- 2019

Time Allowed: 75 mins

SECTION A: Reading and Comprehension

This section may comprise of 20 questions

Read the paragraph and answer the questions.

1. First, let us note that China currently has about 150,000 State Owned Enterprises (SOE),
which hold more than 100 trillion yuan ($15.7 Trillion) in assets and employ over 30 million
people. Despite this “handicap,” China handsomely outperformed Brazil, Russia and India.
Evidently, privatization is not necessary to achieve spectacular growth. Emirates, Etihad, and
Qatar Airways are all state-owned airlines which started from scratch and have developed
excellent global reputations for quality, overtaking many privately-run airlines.

2. While there have successful privations elsewhere, the Pakistani record is dismal. Here,
“privatization” is actually an asset sale at throwaway prices. To enable such sales, the
government not only takes over all liabilities, but covers many types of business risks,
essentially guaranteeing enormous profits to the buyers. This misunderstanding is reflected in
the corpses of many privatized SOE’s which were stripped of their assets and left to rot. For
this reason, the list of failures, and mega-failures, of privatization both within Pakistan and
globally, is endless.

3. The idea that SOE’s are always inefficient and private enterprises are always efficient is a
myth. Inefficiencies exist in both private sector and SOEs. It is perfectly clear that success or
failure of private businesses as well as SOE’s is based on essentially the same factors. Among
the success factors, good Corporate Governance plays a key role. Recognition of this has led
to widespread adoption of good governance principles globally among both public and
private sector enterprises. Experts at the Pakistan Institute of Corporate Governance (PICG)
provide world class training to leading businesses in the entire Asian region. PICG is a non-
profit group run by highly qualified Pakistani executives who run courses on corporate
governance for directors and senior managers of Pakistani companies.

4. Surprising as it may seem, if we remove the burden of interest payments on some large
loans taken earlier, the PIA is actually making a small profit on its current operations. This
shows that it is not operational inefficiency, but bad management, which is the problem with
PIA. Since the PIA is an SOE, regardless of whether or not it is privatized, the debt burden is
the responsibility of the government. PIA does not have insurmountable structural problems.
There is enough dynamism, initiative and know-how in the current and past staff of the PIA
that if they were given a clean slate and an opportunity to run the company, they could
operate it efficiently.

5. Pakistan is also blessed with many world class business leaders who have the desire to
serve their country, and excellent management skills. With vision, and support from the
government, an appropriate team could put together a turnaround plan in short order. We
must erase the debt burden to allow for a fresh start, and also make radical management
reforms. Even if political considerations necessitate privatization, an employee buyout
provides a privatization plan which would be acceptable to all parties. Growth depends on
 building and strengthening institutions, both public and private. Imagine the consequences if
we were to sell all inefficient ministries to foreigners!

1. The main idea of the first paragraph is to explain that:

A. China has grown faster than Brazil, India and Russia.
B. New airlines can rapidly develop reputations for high quality
C. Privatization is not necessary for rapid growth
D. PIA can imitate Etihad, Emirates and Qatar Airways, and achieve excellence.

2. The main idea of the second paragraph is:

A. There have been many successful privatizations outside Pakistan
B. Privatization has not been very successful in Pakistan in the past
C. Government guarantees are needed to ensure profits for private buyers of SOEs.
D. Private owners get rid of excess employees and assets to make huge profits and create
efficient private industries.
3. The main idea of the third paragraph is:
A. PICG provides world class training in Corporate Governance.
B. Private sector is not necessarily more efficient than the public sector.
C. SOE’s need training in corporate governance to catch up to the private sector.
D. Corporate Governance is the key to achieving efficiency for both SOE’s and private
firms
4. The main idea of the fourth paragraph is:
A. PIA is actually functioning reasonable, and is not hugely inefficient
B. PIA has a heavy burden of debt.
C. PIA can operate well only if the government provides heavy subsidies to PIA.
D. PIA has excellent personnel, and is running efficiently, so there is no need to privatize
it.
5. The main idea of the fifth paragraph is:
A. PIA should be managed by world class business leaders in private sector
B. PIA is a national asset and should be supported by the government even if it is
inefficient
C. Cancellation of debt and improvement of management will create efficiency in PIA.
D. Instead of just privatizing PIA, we should privatize all inefficient ministries.

E. Which of the following titles best describes the passage:

A. Reform PIA; Don’t Sell It.
B. PIA: Burdened by Debt and Inefficiency.
C. PIA: A National Asset We should be proud of.
D. Learning from China’s Experiences with Privatization.

F. Which of the following statements CANNOT be inferred from the passage:

A. China has performed well relative to India, Brazil and Russia.
B. SOE’s can be as efficient as private enterprises.
C. Pakistan has world class leaders with excellent management skills.
 D. All members of the business community in Pakistan desire to serve their country.

G. Which of the following statements DOES NOT FOLLOW from the passage:
A. Etihad, Emirates and Qatar Airline are efficient because they are owned by their
governments.
B. The idea that private enterprise is always more efficient than SOEs is a myth.
C. With vision and provision of support, the government can turn around performance at
PIA without privatizing it.
D. Pakistan has the capability of providing world class training in corporate governance.

E. The tone of the passage is:

A. Critical of blind belief in privatization as a solution to the problems of PIA.
B. Appreciative of the critical role of SOE’s in the growth of China.
C. Critical of the Business Leaders of Pakistan.
D. Appreciative of the efficiency of PIA.

F. Which of the following statements best supports the ideas presented in the passage
above:
A. Privatization has generated huge profits for many governments abroad.
B. Poorly performing companies can be turned around by improved management.
C. SOE’s are a great burden on the government budget in Pakistan.
D. PTCL was a highly successful privatization in Pakistan.

SUBJECT TEST (MPhil Public Policy)

This section may comprise of 8 questions

1) The first Pakistani citizen to win the Nobel Prize was

a. Ms. Malala Yosufzai
b. Ms. Nargis Mavalwala
c. Prof. Dr. Abdus Salam
d. Mr. Naguib Mahfouz
2) The acronym IMF stands for
a. International Money Federation
b. International Monetary Fund
c. Independent Monetary Foundation
d. International Monetary Foundation
3) Pak-China Economic Corridor includes:
 a. China’s financial assistance for Road from Pakistan to China
b. China’s assistance for Road network and Energy projects
c. China’s assistance for Road network, energy and some other projects
d. China’s assistance to be spent on any development project
4) Which of the following would reduce more the chances of floods in Pakistan:
a. Building more canals
b. Reduction in rainfall
c. Building more dams
d. Rapid Global Warming
5) The United Nations in the year 2015 set the intergovernmental development goals termed as the
SDGs, what does the acronym SDG stand for?
a. Systematic Development Goals
b. Sustainable Development Grail
c. Sustainable Development Goals
d. Sustainable Developed Generation

Sample Questions for M.Phil. Development Studies

This section may comprise of 8 questions

1. If the Human Development Report says that in terms of Gross National Product,
Argentina is a high income country with low Human Development Index (measure of
human wellbeing including health, education and the quality of human life) and India
is a low income country with high Human Development Index, then which of the
following statement is NOT true:

A. Development is more than just about economic progress measured at a national

scale.
B. Development is always about economic progress measured at a national scale.
C. Quality of life in India is better than in Argentina.
D. Education and health are important components of development.

2. According to a report titled ‘Voices of the Poor’ published by World Development

Report in 2001, a person says, ‘For me, being poor is having to wear trousers that are
too big for me.’
According to this text, which of the following statements is true about poverty?
A. Poverty is always measurable.
B. Poverty is always about not having enough to wear and eat.
C. Poverty can be examined qualitatively.
D. Poverty is a multi-dimensional concept.
 3. Trade needs two partners, and for every market there is a saturation point in which
businesses search for new markets. It is said that increasing trade between countries
mean more jobs and higher wages for all partners. Which choice from below will be
the consequence of such decision?

A. It will create more jobs and higher wages.

B. It may lead to businesses employing fewer workers and increase the production on low
wages in some other part of the world which will result in higher unemployment and
low wage jobs.
C. Unemployment does not have to do anything with trade.
D. Low wages are result of new products.

4. Free trade is beneficial for consumers because more competition leads to lower prices
and higher quality. What will be the best choice from below:?

A. Globalization does expand the variety of available, goods savings are not necessarily
passed on to the consumer
B. High prices for goods will result in starvation.
C. More competition will lead to lower wages.
D. All of the above.

5. African Americans in the United States are relatively poor compared with American
Whites, though much richer than people in the Third World. It is, however, important
to recognize that African Americans have an absolutely lower chance of reaching
mature ages than do people of many Third World societies, such as China, or Sri Lanka,
or parts of India. According to this text, which one of the following do you think is
NOT true?
A. African Americans are not income poor.
B. The quality of health care systems in China, India and Sri Lanka is low.
C. African Americans are worse off than people in India in terms of health.
D. People in the Third World may have fewer incomes but may experience high
education and health care.

Sample Question for MPhil (Environmental Economics)

This section may comprise of 8 questions

1. Which of the following products would be least capable of producing an externality?

A. inoculations against disease
B. cigarettes
C. Food
D. Education
2. A positive externality generates
A. a social cost curve that is above the supply curve (private cost curve) for a
good.
 B. a social value curve that is above the demand curve (private value curve) for
a good.
C. a social value curve that is below the demand curve (private value curve) for
a good.
D. none of these answers.

3. The most efficient pollution control system would ensure that

A. the regulators decide how much each polluter should reduce its pollution.
B. no pollution of the environment is tolerated.
C. each polluter reduce its pollution an equal amount.
D. the polluters with the lowest cost of reducing pollution reduce greatest
amount of pollution

4. To internalize a positive externality, an appropriate public policy response would be to

A.
ban the good creating the externality.
B.
tax the good.
C.
subsidize the good.
D.
have the government produce the good until the value of an additional unit is
zero.
5. The law of supply states that an increase in the price of a good
A. increases the quantity supplied of that good along its supply curve.
B. increases the supply of that good.
C. decreases the demand for that good.
D. decreases the quantity demanded for that good along its demand curve

Sample Question for MPhil (Health Economics)

This section may comprise of 8 questions

1. Factors that distinguish health economics from other areas include all of these EXCEPT:
a. Barriers to entry
b. Externalities
c. Asymmetric information
d. None of the above
Q2 . Fair distribution of resources with a goal to eliminate health care disparities known as:
a. Equity
b. Priority
c. Social justice
d. Efficiency
Q3. Which of these factors causes Autism?
a. Genetic Factors
b. Vaccines
 c. The common cold
d. A mother eating Spicy food while pregnant

Q4. Which country has the highest per capita expenditures on health care?
a. Australia
b. Japan
c. Norway
d. United States

Q5 .All of these are TRUE about "Fee for service" method of paying for health care providers
EXCEPT:
a. Professionals receive a fee for each service they provide

b. The service for which payment is made can be separated services

c. Based on charges that are set either by professionals or the patient

d. It's similar to "Charge-based payments method for paying hospitals"