#1
Which of the following is an example of an environmental externality?
A factory emitting pollution into the air and water
ExplanationUnintended consequences of economic activities affecting third parties.
#2
What does the term 'Tragedy of the Commons' refer to in environmental economics?
A situation where individuals overuse and deplete shared environmental resources
ExplanationOverexploitation of resources due to lack of property rights.
#3
Which economic concept is used to evaluate the trade-offs between environmental conservation and economic development?
Cost-benefit analysis
ExplanationAssessing the positives and negatives of environmental actions in monetary terms.
#4
What does 'sustainable development' aim to achieve?
Meeting the needs of the present without compromising the ability of future generations to meet their own needs
ExplanationBalancing economic growth with environmental and social well-being.
#5
What is the difference between 'private goods' and 'public goods'?
Private goods are both rivalrous and excludable while public goods are neither
ExplanationRivalry and exclusivity define accessibility and consumption.
#6
Which term refers to the total economic value of all goods and services provided by a particular ecosystem?
Total Economic Value (TEV)
ExplanationQuantification of ecosystem services for economic assessment.
#7
Which policy tool is commonly used to address negative externalities in environmental economics?
Taxes
ExplanationImposing charges on activities causing environmental harm.
#8
What is the concept of 'cap and trade' in environmental economics?
A system where companies can buy and sell permits to emit pollutants
ExplanationSetting a limit on emissions and allowing trading of permits.
#9
What does the concept of 'environmental Kuznets curve' suggest?
There is an inverted U-shaped relationship between environmental degradation and income levels
ExplanationInitial worsening, then improvement of environment with economic growth.
#10
What role does discounting play in environmental decision-making?
It prioritizes short-term gains over long-term sustainability
ExplanationPreferring immediate benefits over future consequences.
#11
Which economic theory suggests that environmental degradation is an inevitable consequence of economic growth?
Neoclassical economics
ExplanationPrioritizing economic growth regardless of environmental impact.