Roll N Department of Humanities and Social Sciences Indian Institute of Technology, Bombay HS 200, Division $2 Half-Semester Course Final Examination Date: 25 February 2015 Time: 2.00 - 4.00 PM. tal marks: 1 Please read the instructions and questions carefully. Write your Roll No on the top right comer of this question paper cum answer sheet. No queries will be entertained by the Instructors or Invigilators as per instructions given by the Dean AP. After the examination retum this question cum answer sheet to the invigilators, Attempt all the questions. Students caught copying will be given FR grade, and will be reported to the Dean (Academic Affairs) for disciplinary action. Section A. Multiple Choice Questions: [16 * 0.5 = 8Marks} 1, The Polluter Pay Principle was propounded by (a) Adam Smith John M. Keynes (©) A.C. Pigou (@) J.B. Say 2. The concept of “invisible hand” was proposed by (a) John M. Keynes (b) A.C. Chiang, (©) Joseph Stiglitz, 4 Adam Smith, The gap between total energy consumption and production in India during 1980-2005 had been (a) Gradually increasing (b) Gradually decreasing (©) More or less constant (@) Completely eliminated 4, The three major issues in “Environment Studies” are (a) Inflation, Unemployment and Regional Disparity (b) Rural Poverty, Antenatal Health and Social Injustice \oH*ficiency, Optimality and Sustainability (4) Inflation, Unemployment and Inadequate Housing Facility 5. “Sanitation is more important than independence” is a famous statement made by (a) Jawaharlal Nehru (b) Jairam Ramesh {QM K. Gandhi (d) Netaji Subhas Chandra Bose6. When Social Cost(s) exceed the Private Cost(s), there is possibility of market failure due to (a) Asymmetric information 4b) Negative extemality (©) Positive externality (d) Absence of proper governance 7. Green GDP is defined as (a) Green GDP = Total area covered by the Forest, River, Sea and Wetlands (oy Green GDP = NDP © Imputed Environmental Costs (©) Green GDP = GDP |. Imputed Environmental Costs (@) Green GDP = GDP (Total Coal, Petroleum and Electric Energy Consumption 8. In the case of Non-Renewable resources, the lost benefit due to future use is known as (a) Green premiun0 (b) Social cost (©) Déletion premium reen cost O 9, The major direct effects of deforestation are SerSercosin Flooding and Desertification ) Increased unemployment, Drought and recession (©) Increased dependency burden, Lack of savings and recession (@) Fall in underground water level and global warming 10. Which of the following sources of energy is NOT renewable? (a) Hydropower (b) Biomass foleum (@) Solar power 11. The Coase Theorem [Ronald Coase (1960)] states that the private sector can achieve environmental efficiency, as long as property rights are clearly assigned. (a) True Be (©) It depends on the judiciary. (4) It depends on the magnitude of pollution. 12, When extemalities exist, economic efficiency is achieved whenever marginal private benefit equals marginal private cost. erTrue (b) False (©) It depends on the magnitude of private benefit (4) It depends on the magnitude of private cost. 13, The imputed environmental costs comprise of the economic costs induced by (a) Natural resource depletion (b) Destruction of the ecosystem (©) Degradation of natural assets, as well as air and water pollution Nr All of the above14, Which of the following involves asking people how much they would be willing to pay ina hypothetical situation? (a) Advocate valuation _Spyfiypothetical valuation (¢) Contingent valuation (a) Hedonic Price Method 15, Which of the following is an example of a positive externality? (a) A firm emits pollution into the air, harming members of the society (b) An auto body shop makes a lot of noise, reducing the property values of nearby homes Ng secoastal dairy farmer's undeveloped land offers unimpeded views of the ocean for a nearby neighbourhood (@) You go to a store and pay $.85 for a candy bar that you then eat 16, Which one of the following creates an incentive for firms to reduce pollution? (a) The failure of the government to tax firms that cause pollution (b) Government subsidies paid to firms that increase their output (c) An increase in negative extemalities as firms increase their output {4A tax levied on firms that cause pollution Section B: Short-Answer Type Questions: —(6+3 = 9 marks) Answer both the questions in this section. 1. What ate the common characteristics of Developing Nations? A country is poor because it is poor” —R. Nurkse (1953), Explain the statement in terms of vicious circle of poverty. [6 Marks]2. Illustrate the phenomenon of Tragedy of Commons in relation to the Free Rider Problem, [3 Marks]