Chapter 10: Environmental Economics — Online MCQ Test
ECONOMICS · CLASS 12th · Tamil Nadu State Board
Practice Chapter 10: Environmental Economics with a free chapter-wise online MCQ test.
This chapter covers: Looks at the economic dimensions of natural resource use and environmental degradation introducing the idea of sustainable development and policy tools such as taxes and regulation....
AI-generated questions from basic to board-exam level, with instant results and explanations.
Chapter 10: Environmental Economics — Important Questions & Answers
What is meant by environmental economics?
- A. The study of how money is earned from exports
- B. The study of the economic aspects of environmental use and conservation
- C. The study of agricultural production alone
- D. The study of banking and insurance activities
Answer: B. The study of the economic aspects of environmental use and conservation
Environmental economics studies the relationship between the economy and the environment, especially the use of natural resources and control of pollution.
Environmental economics studies the relationship between the economy and the environment, especially the use of natural resources and control of pollution.
Which of the following is a renewable resource?
- A. Coal
- B. Petroleum
- C. Solar energy
- D. Natural gas
Answer: C. Solar energy
Solar energy is renewable because it is naturally replenished and does not get exhausted through use in the short run.
Solar energy is renewable because it is naturally replenished and does not get exhausted through use in the short run.
The main purpose of imposing a pollution tax is to:
- A. Increase the price of all goods equally
- B. Encourage producers to reduce pollution
- C. Remove all industries from the economy
- D. Increase government borrowing
Answer: B. Encourage producers to reduce pollution
A pollution tax makes polluting activities more expensive, encouraging firms to reduce emissions and adopt cleaner methods.
A pollution tax makes polluting activities more expensive, encouraging firms to reduce emissions and adopt cleaner methods.
A government introduces strict emission standards for industries. What is the most likely immediate effect?
- A. Industries may need to install cleaner technology
- B. Pollution automatically increases
- C. Natural resources become infinite
- D. Demand for all goods falls to zero
Answer: A. Industries may need to install cleaner technology
Regulations often require firms to reduce emissions by adopting pollution-control equipment or cleaner production methods.
Regulations often require firms to reduce emissions by adopting pollution-control equipment or cleaner production methods.
Consider the following: A factory can either install a pollution-control device at a cost of ₹10 lakh or pay a pollution tax of ₹8 lakh annually. If the device reduces pollution significantly and also lowers future health damage to society, which option is economically better from a social welfare perspective?
- A. Always pay the tax because it is cheaper for the factory
- B. Install the device if the total social cost of pollution is higher than ₹10 lakh
- C. Do nothing because pollution is a private matter
- D. Increase output without any controls
Answer: B. Install the device if the total social cost of pollution is higher than ₹10 lakh
Economic decisions in environmental economics consider social costs, not just private costs. If the pollution-control device reduces greater social damage, it is the better choice.
Economic decisions in environmental economics consider social costs, not just private costs. If the pollution-control device reduces greater social damage, it is the better choice.