Chapter: 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
Answer» A. Garrelt-Hardin
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
Answer» B. Economic agents and environment
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
Answer» C. Household of man
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
Answer» A. Environment resource planning
5.

Market failure occurs when market do not maximize

A. Production
B. Utility
C. Welfare
D. Resource utilization
Answer» C. Welfare
6.

Environment good is

A. Car
B. House
C. Air, water, sunlight
D. Wheat
Answer» C. Air, water, sunlight
7.

Environmental Economics is

A. Social Science
B. Positive & normative science
C. Micro economics
D. Macro economics
Answer» B. Positive & normative science
8.

Public goods are

A. Non-excludables
B. Public bads
C. Free riders
D. Externalities
Answer» A. Non-excludables
9.

There is rivalry and exclusiveness in the use of

A. Public good
B. Private good
C. Public bad
D. None of them
Answer» B. Private good
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
Answer» A. Unidimensional
11.

Which one is not the cause of market failure

A. Externalities
B. Imperfect market
C. Indivisibilities
D. Pareto optimality
Answer» 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
Answer» C. its MSB should be equal to 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
Answer» A. An externality of consumption
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
Answer» B. It is reciprocal
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
Answer» 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
Answer» B. Human Rights
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
Answer» A. It results from an inherent tension between collective and individual responsibility
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
Answer» A. Exceed the private marginal cost
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
Answer» 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
Answer» 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
Answer» A. public good
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
Answer» B. national defence service
23.

Public goods are those goods for which consumption is

A. Rival
B. Regulated
C. Non-rival
D. Unregulated
Answer» C. Non-rival
24.

Non-rivalry is a feature of

A. Public good
B. Goods but not service
C. Excludable good
D. All non-excludable goods
Answer» A. Public good
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
Answer» C. Public 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
Answer» B. Rival and 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
Answer» A. Private 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
Answer» D. Its use by one person does not decrease the quantity available for someone else
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
Answer» C. Non-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
Answer» B. Non-rival
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
Answer» A. Rival
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
Answer» A. Neither rival nor 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
Answer» C. Both rival but 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
Answer» 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
Answer» 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
Answer» A. Receives the benefits of a good but avoids paying for it
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
Answer» 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
Answer» B. Public good
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
Answer» C. A common resource
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
Answer» D. A national park
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