Environmental Economics MCQs

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1. What is the primary focus of environmental economics?
(A) The study of financial markets
(B) The operation of financial institutions
(C) The behavior of individual consumers
(D) The impact of economic activities on the environment

2. Which of the following is an example of an externality?
(A) A factory producing goods
(B) Pollution affecting nearby residents
(C) A company hiring employees
(D) Business expansion

3. What does carbon pricing aim to achieve?
(A) Lower fossil fuel prices
(B) Reduce carbon emissions by assigning a cost
(C) Increase renewable subsidies
(D) Promote electric vehicles

4. What is the purpose of a carbon tax?
(A) Subsidize renewable energy
(B) Charge firms based on carbon emissions
(C) Reduce income tax
(D) Promote innovation

5. Which is a market-based environmental regulation?
(A) Cap-and-trade
(B) Command-and-control
(C) Direct controls
(D) Mandatory reporting

6. What is market failure?
(A) Inefficient resource allocation by markets
(B) Business bankruptcy
(C) Stock market decline
(D) Reduced consumption

7. What is the tragedy of the commons?
(A) Public-private conflict
(B) Wealth inequality
(C) Overuse of shared resources
(D) Market monopoly

8. What is environmental valuation?
(A) Market efficiency
(B) Monetary value of environmental benefits and costs
(C) Cost-benefit analysis
(D) Resource allocation

9. Purpose of cost-benefit analysis?
(A) Increase profits
(B) Compare costs and benefits of policies
(C) Evaluate business growth
(D) Assess consumer behavior

10. Which is a direct valuation method?
(A) Hedonic pricing
(B) Contingent valuation
(C) Revealed preference
(D) All of the above

11. Sustainable development means?
(A) Growth with environmental protection
(B) Short-term profits
(C) Fewer regulations
(D) No environmental rules

12. A benefit of renewable energy is?
(A) More pollution
(B) Reduced greenhouse gases
(C) Resource depletion
(D) Fossil fuel dependence

13. What is eco-efficiency?
(A) Maximum resource use
(B) Less resource use with productivity
(C) Increased production only
(D) Renewable use only

14. Which principle values natural resources?
(A) Marginal utility
(B) Marginal cost
(C) Marginal benefit
(D) Opportunity cost

15. Environmental externality refers to?
(A) Green investment
(B) Direct cost
(C) Pollution tax
(D) Unintended environmental impact

16. Which policy provides incentives to reduce pollution?
(A) Standards
(B) Command-and-control
(C) Emission trading
(D) Fossil fuel subsidies

17. Pollution abatement means?
(A) Reducing pollutant emissions
(B) Increasing output
(C) Expanding agriculture
(D) Increasing energy use

18. What is a Pigovian tax?
(A) Luxury tax
(B) Renewable subsidy
(C) Income tax
(D) Tax on negative externalities

19. Which system caps pollution and allows trading?
(A) Emission standards
(B) Carbon tax
(C) Cap-and-trade
(D) Green subsidies

20. What is greenwashing?
(A) Government regulation
(B) Genuine sustainability
(C) Misleading environmental claims
(D) Transparency

21. Value of preserving nature for future generations?
(A) Existence value
(B) Bequest value
(C) Option value
(D) Use value

22. Resource scarcity means?
(A) Resource abundance
(B) Limited resources vs demand
(C) Lower extraction costs
(D) Unlimited supply

23. Which concept reflects future value of resources?
(A) Discount rate
(B) Present value
(C) Net present value
(D) Future value

24. Environmental justice refers to?
(A) Fair distribution of environmental impacts
(B) Reduced regulations
(C) Growth over environment
(D) Profit focus

25. Which encourages eco-friendly practices financially?
(A) Subsidies and tax credits
(B) Direct bans
(C) Controls
(D) Restrictions

26. Ecosystem services valuation means?
(A) Assigning monetary value to ecosystem benefits
(B) Cost of destruction
(C) Economic efficiency
(D) Market price only

27. Cost of resource depletion is called?
(A) Resource rent
(B) User cost
(C) External cost
(D) Marginal cost

28. Sustainable consumption means?
(A) Fewer regulations
(B) Maximizing extraction
(C) Meeting present needs without harming future needs
(D) Higher production

29. Trade-offs between development and environment involve?
(A) Efficiency
(B) Market equilibrium
(C) Sustainable development
(D) Consumer surplus

30. Natural capital refers to?
(A) Extraction costs
(B) Financial investment
(C) Human skills
(D) Stock of natural resources and ecosystems

31. Environmental risk assessment is?
(A) Demand forecasting
(B) Measuring profits
(C) Financial risk analysis
(D) Evaluating environmental hazards

32. Tradable pollution rights system is called?
(A) Pollution permit
(B) Carbon tax
(C) Environmental standard
(D) Emission trading system

33. Precautionary principle means?
(A) Ignoring risks
(B) Preventive action under uncertainty
(C) Growth priority
(D) Tech-only solutions

34. Green economy focuses on?
(A) Fossil fuels
(B) Profit only
(C) No regulation
(D) Well-being with reduced environmental risks

35. Sustainable agriculture means?
(A) Eco-friendly farming practices
(B) Maximum yields
(C) Chemical use
(D) Ignoring impacts

36. Environmental accounting involves?
(A) Market failure
(B) Integrating environment into economic decisions
(C) Growth measurement
(D) Profit focus

37. Bioeconomy is based on?
(A) Fossil fuels
(B) Sustainable biological resources
(C) Ignoring impacts
(D) Digital economy

38. Land-use planning means?
(A) Production maximization
(B) Unrestricted development
(C) Urban sprawl
(D) Managing land to reduce impacts

39. Market mechanisms for environment are called?
(A) Direct controls
(B) Market-based instruments
(C) Regulations
(D) Bans

40. Environmental policy refers to?
(A) Deregulation
(B) Economic growth plans
(C) Industrial output strategy
(D) Rules managing human impact on environment

41. Interdependence of economy, society, and environment is?
(A) Sustainable development
(B) Market efficiency
(C) Growth
(D) Profit maximization

42. Green investment means?
(A) Fossil fuels
(B) Investment in sustainable projects
(C) Short-term gains
(D) No environmental concern

43. Willingness to pay refers to?
(A) Maximum amount for environmental benefits
(B) Minimum cost
(C) Fixed price
(D) Savings

44. Sustainable resource use economics is called?
(A) Traditional economics
(B) Neoclassical economics
(C) Behavioral economics
(D) Ecological economics

45. Resource efficiency means?
(A) Overuse
(B) Minimizing waste, maximizing value
(C) Ignoring limits
(D) Production priority

46. Environmental sustainability refers to?
(A) Deregulation
(B) Unlimited production
(C) Growth focus
(D) Meeting present needs without harming future

47. Key principle of sustainable development?
(A) Depletion
(B) Short-term profits
(C) Intergenerational equity
(D) Degradation

48. Social cost of carbon is?
(A) Capture cost
(B) Renewable cost
(C) Fossil fuel profit
(D) Economic damage from carbon emissions

49. Environmental degradation means?
(A) Deterioration of ecosystems and resources
(B) Conservation
(C) Preservation
(D) Sustainability

50. Renewable resources are?
(A) Rapidly exhausted resources
(B) Finite resources
(C) Non-renewable energy
(D) Naturally replenishable resources

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