NABARD Assistant Manager Grade A (RDBS) · India · National Bank for Agriculture and Rural Development
Original practice questions written to the published syllabus · not past papersEconomics applied to land, water, forests and the environment: property rights, depletion, valuing what markets do not price, and correcting externalities.
In the exams: agricultural economics PhD entrance and fellowship examinations, resource and environmental economics (heavy); agricultural scientist eligibility tests (heavy); agricultural development bank officer recruitment, climate change and soil and water conservation (present)
How our questions for NABARD Assistant Manager Grade A spread across the units of Natural Resource & Environmental Economics. Difficulty: 8 easy, 13 medium, 0 hard.
| Command-and-control versus emission trading | 4 | |
| Economics of water resources | 4 | |
| Environmental impact assessment | 4 | |
| Ecosystem services | 3 | |
| Property rights | 2 | |
| Common property and open access | 1 | |
| Environmental accounting | 1 | |
| Sustainability indicators | 1 | |
| Externalities and the Pigouvian tax | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
Soil formation and nutrient cycling are classed in the Millennium Ecosystem Assessment as:
C. Supporting services
Supporting services underlie all other services: soil formation, nutrient cycling and primary production. Existence value is a component of total economic value, not a service category.
Further reading: Millennium Ecosystem Assessment 2005
In a hard-rock area, farmers keep drilling deeper borewells as the water table falls, each trying to keep pace with neighbours. Economists describe this as:
B. Competitive deepening, an open-access outcome that dissipates resource rent
When no one has rights to the aquifer, each user's pumping raises others' costs and reduces their water, and each deepens to avoid being left dry. Aggregate pumping cost rises without more water, the open-access rent-dissipation result. The effect on neighbours is a technological externality through the resource, not through prices.
Further reading: Shah; Tietenberg and Lewis
Nitrate from thousands of farms reaches a city's drinking water supply. Why is a Coasean bargain between the farmers and the city's residents unlikely to solve the problem?
C. Transaction costs are high: many parties, diffuse and hard-to-trace damage, and incentives to free-ride
Coase's result needs low transaction costs. With many dispersed polluters and victims, non-point emissions that cannot be attributed to individual farms, and free-riding among beneficiaries, negotiation fails and public intervention is needed.
Further reading: Coase 1960; Tietenberg and Lewis
The European Union Emissions Trading System, the first large international carbon trading scheme, began operating in:
A. 2005
The EU ETS started in 2005. 1990 is the US Clean Air Act Amendments that created SO2 trading; 1997 the Kyoto Protocol; 2015 the Paris Agreement.
Further reading: European Commission
Many states supply electricity to farm pumps at a flat rate per horsepower or free. The main economic effect on groundwater use is that:
B. The marginal cost of pumping falls to near zero, encouraging extraction beyond the efficient level
With a flat power charge each extra hour of pumping costs almost nothing, so farmers pump until the marginal value of water is near zero, ignoring both private energy costs and the scarcity value. This drives overdraft in many hard-rock and alluvial areas.
Further reading: Shah; World Bank
The concept of 'virtual water', introduced by Tony Allan, refers to:
C. The water used to produce a commodity, which is implicitly traded when the commodity is traded
Virtual water is the water embodied in products; a country importing grain imports the water used to grow it. It is an accounting idea: efficient trade still depends on the opportunity cost of all inputs, not water alone. Green water, not virtual water, refers to soil moisture from rain.
Further reading: Allan 1998
The first stage of an EIA, which decides whether a proposed project needs an assessment and at what level, is called:
C. Screening
Screening decides whether EIA is required. Scoping follows and sets the terms of reference, the impacts and alternatives to study. Appraisal reviews the report; monitoring comes after clearance.
Further reading: UNEP EIA Training Resource Manual
India's current EIA framework is based on a notification issued in 2006 under which Act?
D. The Environment (Protection) Act, 1986
The EIA Notification of 14 September 2006 was issued under the Environment (Protection) Act, 1986. The Water and Air Acts deal with consent to operate from pollution control boards; the Forest Act with diversion of forest land.
Further reading: MoEF EIA Notification 2006
Under India's EIA Notification, 2006, Category A projects are appraised at which level?
A. Central level, by the Ministry with its Expert Appraisal Committee
Category A projects are appraised centrally. Category B projects are appraised by State-level authorities and split into B1 (requiring EIA) and B2 (exempt from full EIA). Thresholds by project type change with amendments and must be checked in the current notification.
Further reading: MoEF EIA Notification 2006
In a pure open-access fishery, which statement about property rights is correct?
B. No one holds rights to the stock and no one can be excluded
Open access is the absence of property rights. Community rights describe common property; state ownership is state property; transferable catch shares are individual transferable quotas.
Further reading: Ciriacy-Wantrup and Bishop 1975
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