UGC NET Questions (Paper – 1)

Statements A, B, C, D and F are correct on taxes, subsidies, permits, policy mixes and valuation. Statement E is wrong because economic instruments are intended to reduce pollution when designed well. Therefore A, B, C, D and F only is correct.

Option A:
Option A is incomplete because it omits F.

Option B:
Option B is correct because it includes A, B, C, D and F and excludes E.

Option C:
Option C is incorrect because it includes E (false).

Option D:
Option D is incorrect because it includes E (false) and omits C.

Statements A, B, C and E are correct as they describe how economic instruments change incentives and behaviour. Pollution taxes and tradable permits put a price on emissions, harmful subsidies can lead to overuse of resources and well-designed user charges can support efficiency and equity. D is wrong because economic instruments usually complement rather than completely replace regulation, and F is wrong since policy mixes often combine price, information and voluntary tools. Therefore, A, B, C and E only is the correct set.

Option A:
Option A is incorrect because it omits E, overlooking the important role of user charges in managing water and waste services. While A, B and C are correct, without E the answer misses a major application area of economic instruments.

Option B:
Option B is correct since it captures the main forms and uses of economic instruments while excluding simplistic or extreme claims in D and F. It reflects the integrated, mixed-instrument approach recommended in environmental economics.

Option C:
Option C is incorrect as it includes F, which wrongly suggests economic tools cannot be combined with other approaches, and omits A, which describes a central instrument (pollution taxes). This combination is therefore incomplete and partially false.

Option D:
Option D is incorrect because it retains F and leaves out B. Ignoring emissions trading while accepting that economic instruments never mix with information campaigns contradicts real-world policy practice.