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ENVIS - Environmental Economics Centre - Quiz

 

 

 

         

Quiz 3

 

1. According to the Arrow's Impossibility Theorem

 A. 

Reasonable assumptions are essential for making social choices.

 B.  

Reasonable assumptions are not essential for making social choices.

 C.  

There is no perfect way of making social choice, given a set of reasonable assumptions.

 D.  

There is always a way of making social choices.

    

2. According to the equimarginal principle, with multiple polluters , efficiency in pollution control requires that the

 A. 

Marginal cost of control be different from different polluters, provided the emissions from each polluter contribute to the damage in a different way.

 B.  

Marginal cost of control be the same for all the polluters, no matter if the emissions from each polluter contribute to the damage in a different way.

 C.  

Total cost of control be the same for all poluters, provided the emissions from different polluters contribute to the damage in a different way.

 D.  

Marginal cost of control be the same for all polluters, provided the emissions from each polluter contribute to the damage in the same way.

    

3. The three primary reasons for regulation under the public interest theory of regulation are

 A. 

Perfect competition,Imperfect information,Externality.

 B.  

Imperfect competition,Imperfect information,Externality.

 C.  

Externality,Transaction Cost,Property Rights.

 D.  

None of the above.

    

4. Efficient emissions in a spatial environment with one receptor require that the ratio of marginal saving from emissions to the transfer co.efficient be equated for all sources.Then the ratio would in turn be equal to

 A. 

Marginal Cost of Pollution.

 B.  

Marginal Benefit from Pollution.

 C.  

Marginal Damage from Pollution.

 D.  

Marginal Social Cost of Pollution.

    

5. The Ratchet effect involves

 A. 

Repeated interaction between Regulators.

 B.  

Repeated interaction between Regulators and the Firm.

 C.  

Repeated interaction between different polluting Firms.

 D.  

None of the above.

    

6. _______________ shows , how quantity demanded depends on prices keeping utility constant, _________________ shows how quantity demanded depends on prices , keeping income constant.

 A. 

Ordinary demand , Compensated demand.

 B.  

Compensated demand , Ordinary demand.

 C.  

Marginal demand ,Compensated demand.

 D.  

Ordinary demand , Marginal demand.

    

7. Which among the following is not an indirect method of valuation

 A. 

Travel Cost Method (TCM).

 B.  

Contingent Valuation Method (CVM).

 C.  

Dose response method.

 D.  

Hedonic Pricing (HP).

    

8. An open access externality occurs when

 A. 

Insufficient competition exists.

 B.  

Property rights are enforced.

 C.  

Property rights are not enforced.

 D.  

Unethical behaviour exists.

    

9. The stock of capital could be held constant by reinvesting all Hotellings rents from non-renewable resources extraction in man-made capital.This propositon for sustainable development is given by

 A. 

The Safe Minimun Standards (SMS) approch.

 B.  

The non-declining natural capital stock approach.

 C.  

The Hartwick - Solow approach.

 D.  

The Daly's operation principle.

    

  

 





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