Time: 2:00 hours Maximum
Marks: 20
Attempt any four questions. All questions carry equal
marks.
1.
Write short notes on any two: 2 ½
* 2
a)
Reciprocal Spillover
b)
Tradable Emission Permit
c)
Pigouvian Tax
d)
Marginal Abatement Cost
2. Define the concept of externalities
& present a simple classification of
externalities. 5
3. An economic efficiency
can be achieved by internalizing negative
externalities by equating private
cost to social cost. Explain. 5
4. Present an outline of different criterion for choice of pollution control instruments. How command and control instruments are
better than market based instrument
to control pollution in developing countries? 5
5. Do you agree with the fact that increased international trade leads to environmental
degradation. Give reasons to support your arguments. 5
6. Compare the likely outcome of cooperative and non-cooperative behaviour of the country’s using
optimization analysis in case of reciprocal
spillover. 5
7. The Coase Theorem
demonstrates that from rational
bargaining an efficient allocation
of resources would be possible irrespective of how property rights were initially allocated. 5
8. Define a public
good and its relevance to environmental goods. Explain that the causes of market failure are imperfect information, uncertainty and irreversibility. 5 
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