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Econ 428: Environmental Economics Question Paper

Econ 428: Environmental Economics

Course:Bachelor Of Science In Economics And Mathematics

Institution: Kabarak University question papers

Exam Year:2008

INSTRUCTIONS:
1. Answer QUESTION ONE and any other TWO questions.
QUESTION 1
(a) Define Environmental Economics (2mks)
(b) Explain the role played by the Environmental in the economy (6mks)
(c) Briefly discuss ten pollutants likely to be found in Nakuru town (7mks)
(d) Explain any five criteria the environmental quality agency must take into account
when choosing a specific environmental policy (10mks)
(e) Explain why pollution occurs in a market (5mks)
QUESTION 2
(a) Explain what you understand by an externality (2mks)
(b) Discuss using diagrams the coarse theorem (11mks)
(c) What are the weaknesses of the coarse theorem? (7mks)
QUESTION 3
(a) Precisely explain two principles of a good environmental policy (4mks)
(b) What is Kenya’s policy on the environmental? (16mks)
QUESTION 4
(a) Distinguish between the following paired concepts
(i) Efficiency and equity (3mks)
(ii) Travel cost and Hedonic price methods of environmental appraisal
(3mks)
(b) Assuming a public policy intended to improve water quality to benefit a large
number of individuals in the society. The expected cash flow of this project is as
follows:
YEAR PROJECT CASH FLOW “000” (KSH)
0 (400)
1 100
2 100
3 100
Assume the social discount rate of 7%. Calculate the net present value (NPV) and
comment (8mks)
(c) Assume you were hired to determine the benefits of improving the water quality
in lake Victoria. Explain clearly how you will go about doing it.
(6mks)
QUESTION 4
(a) Explain how equity considerations make the most socially desirable level
emissions different from the socially efficient level (5mks)
(b) Using the relevant tools of analysis, explain the conditions of efficiency
(6mks)
(c) Market incentive policy instruments can be shown to be the least cost factor
solution to the problem of attaining, ambient environmental standards. Clearly
explain why market incentive solutions are not widespread (5mks)
(d) Different countries have adopted different approaches to control pollution.
Explain (4mks)
QUESTION 5
(a) Describe the process of cost-benefit analysis (12mks)
(b) What are the limitations of cost-benefit analysis (8mks)

Econ 428: Environmental Economics Question Paper

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