The choice of GMAT Paper tests vs GMATPrep Question Pack 1 really depends on what level you are currently at and the score you would likely obtain.
I generally recommend the GMAT Paper tests to students who are completely new to the GMAT, and are looking for GMAT style questions(same traps, similar language) but of considerably less difficulty. The GMAT Paper tests are excellent for students wjo are scoring average or below on the quantitative section. Another advantage is that the questions are in increasing difficulty level, and it is easier to see at what level one starts to struggle. But overall the difficulty level of the GMAT Paper tests is considerably less than the actual exam, part of the reason is that in the paper tests the average time per question is 1.5 minutes compared to the 2 minutes in the computer adaptive format.
However, if you are scoring, say 70 percentile or higher on the quant, you could just do the hard questions at the end of each section in the GMAT Paper tests. Although, in my opinion your time would be better spent on the GMATPrep Question Pack 1, because these questions are closer to the current format of the exam and were used by the test writers over the last 5 years or so. In that sense they are fresh compared to GMAT Paper tests.
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