Environmental Economics

Question Bank 31 Pages

Mizoram University

Economics

Contributed by

Munni Doshi

CBCS
VI SEMESTER;
DEPARTMENT OF ECONOMICS;
OBJECTIVES
NAME OF THE PAPER: ENVIRONMENTAL ECONOMICS
PAPER – IX

SECTION –A
MULTIPLE CHOICE QUESTIONS (200X1=200)

MCQ Unit 1- Introduction to Environmental Economics
1. The Tragedy of the Commons is a theory put forth by
a) Garrelt-Hardin
b) Adam Smith
c) W.C Clark
d) Samuelson
2. Environmental economics attempts to study the inter relationship between
a) Environment and resource allocation
b) Economic agents and environment
c) Economic problems and environment
d) Environment and ecology
3. Ecology deals with the household of nature while economics deals with
a) Household of goods
b) Household of service
c) Household of man
d) All of the above
4. Which of the following is environment theory that has developed with the integration of economics
a) Environment resource planning
b) Sustainable environment
c) Environment cost analysis
d) Environment pricing
5. Market failure occurs when market do not maximize
a) Production
b) Utility
c) Welfare
d) Resource utilization
6. Environment good is
a) Car
b) House
c) Air, water, sunlight
d) Wheat
7. Environmental Economics is
a) Social Science
b) Positive & normative science
c) Micro economics
d) Macro economics
8. Public goods are
a) Non-excludables
b) Public bads
c) Free riders
d) Externalities
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9. There is rivalry and exclusiveness in the use of
a) Public good
b) Private good
c) Public bad
d) None of them
10. If A imposed externality on B and B has not imposed externality on A, thent the externality is
a) Unidimensional
b) Bidimensional
c) Multidimentional
d) Complex dimensional

11. Which one is not the cause of market failure
a) Externalities
b) Imperfect market
c) Indivisibilities
d) Pareto optimality
12. The Paretian condition for a public good is that
a) its marginal social benefit(MSB) should be greater than marginal social cost(MSC)
b) its MSB should be less than MSC
c) its MSB should be equal to MSC
d) MSB should be divided by MSC
13. An increase in the consumption of a good or service which affects favourably the consumption patterns and desires of
other consumers is
a) An externality of consumption
b) An externality of production
c) An externality of exchange
d) An externality of allocation of resources
14. If A imposed an externality on B and if B imposed externality on A as well
a) It is unidirectional
b) It is reciprocal
c) It is multidirectional
d) It is marginal unidirectional
15. Which is not a measure for solution of market failure
a) Implementation of Property Rights
b) Direct Control Policy of Govt.
c) Sale of Pollution Permits
d) Negative Externalities
16. Which is not amomg the three types of Property Rights
a) Private Property Rights
b) Human Rights
c) Common Property Rights
d) Open-access common property
17. What is the Tragedy of the Common
a) It results from an inherent tension between collective and individual responsibility
b) It can always be resolved through privatization and nationalization of the commons
c) It is independent of the carrying capacity of the commons
d) All of the above
18. In case of negative externality, the social marginal cost will
a) Exceed the private marginal cost
b) Be equal to private marginal cost
c) Fall short of private marginal cost
d) Bear no significant relation to private marginal cost
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19. In case of positive externality social marginal cost
a) exceed private marginal cost
b) be equal to private marginal cost
c) have no specific relation to private marginal cost
d) fall short of private marginal cost
20. Common property
a) Is owned by specific people
b) Is inexhaustible
c) Refers strictly to land resources
d) Refers to goods owned by society at large and freely used by anyone

21. When consumption of a good is non-rival and non-excludable the good is
a) public good
b) mixed good
c) private good
d) service
22. An example of a public good is
a) a loaf of bread
b) national defence service
c) a ford truck
d) a home computer
23. Public goods are those goods for which consumption is
a) Rival
b) Regulated
c) Non-rival
d) Unregulated
24. Non-rivalry is a feature of
a) Public good
b) Goods but not service
c) Excludable good
d) All non-excludable goods
25. Non-excludability is a feature of
a) Goods but not service
b) Goods with an external cost
c) Public goods
d) All non-rival goods
26. Pure private goods are those for which consumption is
a) Non-rival and excludables
b) Rival and excludable
c) Rival and non-excludable
d) Non-rival and non-excludable
27. When consumption is rival and excludable, the product is
a) Private good
b) Service not a good
c) Mixed good
d) Public good
28. A good or service or a resource is non-rival if
a) It is not possible to prevent someone from enjoying the benefit
b) It is possible to prevent someone from enjoying the benefit of it
c) Its use by one person decreases the quantity available for someone else
d) Its use by one person does not decrease the quantity available for someone else
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29. If consumption of a good A by one person does not decrease the consumption of good A by another person, then the
good is said to be
a) Non-excludable
b) Excludable
c) Non-rival
d) Rival
30. If I increase my consumption of a good and this has no impact on your ability to consume the same good, then the good is
a) A free good
b) Non-rival
c) Both non-rival and non-exclusive
d) Non-exclusive

31. If one person‟s consumption of a good decreases other people‟s use of a good, the good is said to be
a) Rival
b) A good produced by a natural monopoly
c) A common resource
d) Excludable
32. A public good is
a) Neither rival nor excludable
b) Rival but not excludable
c) Both rival but excludable
d) Not rival but excludable
33. A private good is
a) Rival but not excludable
b) Not rival but excludable
c) Both rival but excludable
d) Neither rival nor excludable
34. A common resource is
a) Not rival but excludable
b) Both rival and excludable
c) Rival but not excludable
d) Neither rival nor excludable
35. Public goods are difficult for a private market to provide due to
a) The rivalness problem
b) The public goods problem
c) The Tragedy of the commons
d) The free rider problem
36. A free rider is a person who
a) Receives the benefits of a good but avoids paying for it
b) Pays for a good but fails to receive any benefit from the good
c) Fails to produce good but is allowed to consume goods
d) Produces a good but fails to receive payment for the good
37. Which of the following is an example of a public good
a) Hot dogs at a picnic
b) Whales in the ocean
c) National defence
d) Apples on a tree in a public park
38. A positive externality affects market efficiency in a manner similar to a
a) Rival good
b) Public good
c) Private good
d) Common resource
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39. A negative externality affects market efficiency in a manner similar to
a) An excludable good
b) A private good
c) A common resource
d) A public good
40. Which of the following is an example of a common resource
a) A fire works display
b) A national defence
c) Iron ore
d) A national park

Key Answer
1. A
2. B
3. C
4. A
5. C
6. C
7. B
8. A
9. B
10. A
11. D
12. C
13. A
14. B
15. D
16. B
17. A
18. A
19. D
20. D
21. A
22. B
23. C
24. A
25. C
26. B
27. A
28. D
29. C
30. B
31. A
32. A
33. C
34. D
35. D
36. A
37. D
38. B
39. C
40. D.
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B. Fill in the blanks Unit 1. Introduction to Environmental Economics

1. Environment acts as a_______ for all the waste products that are the result of the process of production and
consumption
2. Environmental problem are basically man-made and ________________has solution for them.
3. Market failure occurs when markets do not ____________welfare.
4. Market in environment good is non-existent, incomplete or ___________
5. ______________create difference between personal expenses and social expenses
6. Public goods are goods which have public usage and they are __________in consumption.
7. ________________resource is a mid way between pure public and private goods
8. The term environment is derived from French word _______________
9. The term ecology was introduced by German biologist Ernst Haeckel
10. Environment goods are _____________goods
11. Environment pollution is an ________________problem
12. Environmental economics is a _____________as well as ________________science
13. Public bads are ______________
14. ______________________is a basic for environmental analysis
15. One of the most peculiar features of a common property resource is it lacks _____________
16. Common property resources are collectively owned by ______________________
17. Ecology is the scientific study of the relationship between _____________and their environment
18. Environment is an __________________concept
19. Environment acts as a ____________in the process of production and finally acts as a _______________
20. The Tragedy of Commons has its genesis in olden cattle grazing pasture in _______________

Key Answer
1. Sink
2. Economics
3. Maximize
4. Distorted
5. Externalities
6. Non-rival
7. Common property
8. Environer
9. Ernst Haeckel
10. Public goods
11. Economic
12. Positive; normative
13. Externalities
14. Pareto Optimality
15. Excludability
16. A group of people
17. Organisms
18. Anthropogenic
19. Producer; waste assimilator
20. England

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A. MCQ unit 2 Development and Environment
1. In which stage of demographic transition is the population growth rate highest?

a. First
b. Second
c. Third
d. Fourth
2. The author of the book An Essay on Principles of Population is

a. Malthus
b. James Princep
c. Keynes
d. Frank Notenstein
3. Consider the following statements and identify the right ones.

i. According to the Malthusian theory, supply of food grains increase in geometric progression
ii. The population grows in arithmetic progression.

a. I only
b. ii only
c. both
d. none
4. Consider the following statements and identify the right ones.

i. According to the theory of demographic transition, in the first stage, birth rate is low but death rate is high
ii. The difference between them is high

a. I only
b. ii only
c. both
d. none
5. Consider the following statements and identify the right ones.

i. In the second stage of demographic transition, death rates declines.
ii. The difference between birth rate and death rate decreases

a. I only
b. ii only
c. both
d. none
6. Consider the following statements and identify the right ones.

i. The third stage is the period of declining growth rates.
ii. The second stage of demographic transition witnesses population explosion

a. I only
b. ii only
c. both
d. none
7. Arrange the birthrates of the states in the highest to lowest order.

a. UP, Bihar, Rajasthan, Karnataka
b. Bihar, UP, Rajasthan, Karnataka
c. UP, Rajasthan, Bihar, Karnataka
d. UP, Bihar, Karnataka, Rajasthan

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8. .The demographic transition model was developed primarily to explain the:
a) social and cultural changes resulting from high levels of in-migration.
b) effect of population movement from rural to urban areas.
c) population changes caused by large short-term changes in birth rates.
d) effect of changing death and birth rates on total population.
9. Which of the following is a method to measure relative poverty?

a. Gini coefficient
b. Lorenz curve
c. Both a and b
d. Poverty line
10. Which of the following is associated with poverty estimation ?

a. Tendulkar committee
b. Lakdawala committee
c. Saxena committee
d. All the above
11. Consider the following statements and identify the right ones.

i. Poverty line is defined as the mid-point of monthly per capita expenditure class having a daily calorie intake of 2400 calorie per
person in urban areas.

ii. In rural areas, it is 2100 calories a day

a. I only
b. ii only
c. both
d. none
12. Which of the following is the nodal Ministry to identify BPL families in urban areas?

a. Ministry of Economic Affairs
b. Ministry of Social Welfare
c. Ministry of Housing and Poverty Alleviation
d. Ministry of Urban Development
13. When poverty is taken in relative term and is related to the distribution of income consumption expenditure its
called:
(a) Law line poverty
(b) Absolute poverty
(c) Relative poverty
(a) None
14 ______ are often used for measuring poverty in relative sense:
(a) HDI
(b) Gini co-efficient
(c) Planning Commission
(a) All of these
15. Poverty is a
a) Social problem
b) Economic problem
c) Political problem
d) Religious problem

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16. EKC is
a) A inverted U shaped curve showing increase in per capita as well as pollution
b) A U shaped curve showing the level of development and carbon emission
c) A U shaped curve showing relation between carbon emission and ozone layer depletion
d) A bell shaped relationship between concentration of certain pollution emission and per capita real GDP
17. Demographic Transition states that as a country becomes industrialed
a) The death rate declines but not the birth rate
b) The birth rate and death rate decline together
c) The death rate decline and then the BR decline
d) The BR declines and then the DR declines
18. In which stage in the demographin transition theory do death rates fall while birth rates remain high leading to rapid
population growth?
a) Stage 1
b) Stage 4
c) Stage 3
d) Stage 2
19. Which year is called the demographic divide in India?
a) 1881
b) 1901
c) 1921
d) 1951
20. Which period is referred to as period of population explosion
a) 1901-1921
b) 1921-1951
c) 1951-1981
d) 1981-2001
21. The second stage of Demographic Transition Theory is characterized by
a) High BR and high DR
b) High BR and low DR
c) Low BR and low DR
d) Low BR and Low DR
22. Economic development is characterized by
a) Structural change in the economy
b) Change in occupational structure
c) Both a) and b)
d) None of the above
23. Which of the following explain the term economic development?
a) Improvement in the technology involved
b) Improve,ment in production
c) Improvement in distributuin system
d) All of the above
24. World Population Day is observed on
a) 15
th
August
b) 11
th
July
c) 26
th
January
d) 25
th
December
25. The number of deaths per 1000 people in a year is called
a) Mortality
b) Death
c) Crude death rate
d) Zero population growth

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26. The maximum number of individuals that can be supported by a given environment is called
a) Environmemt stress
b) Environment resistance
c) Carrying capacity
d) Human carrying capacity
27. Who are responsible for the public consultation process of Environmental Impact Assessment
a) State Pollution Control Board (SPCB)
b) SPCB and District Collector
c) SPCB and CPCB Chairman
d) SPCB and Civil Society
28. GIS is applied to study
a) View shed analysis
b) EIA
c) Wildlife habitat analysis
d) All of the above
29. EIA stands for what?
a) Environmental Impact Area
b) Environment Impact Audit
c) Ecologiacal Impact Assessment
d) Environmental Impact Assessment
30. EIA is mandatory under which one of the following
India‟s legislation
a) Indian Forest Act
b) Air Act
c) Wildlife Protection Act
d) Environment Protection Act
31. EIA is necessary because
a) Development is bad for the environment
b) There is growing interest in sustainability
c) Environmental impacts of development are of public interest
d) None of the above
32. The primary reason for EIA is to
a) Mitigate existing environmental impacts of development
b) Predict the size of impacts of development
c) Describe proposed development
d) Identify the environmental consequences of development in advance
33. The Hartwick Rule depends on
a) The sustainability of physical capital and natural capital
b) The goodwill of the future generation
c) The substitutability of different forms of physical capital
d) The maintenance of physical flows of certain key individual resources
34. In EIA study, enterpretation and evaluation should consider
a) Uncertainty of possible impacts
b) Significance of measured impacts
c) Comparison of alternatives
d) All of the above
35. Economic development refers to
a) Economic growth
b) Economic growth plus changes in output distribution and economic structure
c) Sustainable increase in GNP
d) Improvement in the well being of the urban population

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Environmental Economics

Environmental Economics

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