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Topic Externalities
Asked 4 times across 3 UPSC exams over 9 years (2015–2024), peaking in 2024.
Key insights
- Most tested in CDS — 2 of 4 PYQs
- Most asked in 2024
- Recurs across 3 years (2015–2024)
How it travelled across exams
First appearance in each exam — the same idea, reframed.
CDS 2015 → EPFO 2016 → CAPF 2024
How the concept evolved
Rising — more than half its appearances (3 of 4) are since 2016.
Related concepts
Ideas UPSC tests alongside this one — keep exploring.
Sample questions
You've seen the pattern — here are a few of the actual PYQs.
CAPF2024
Consider the following statements regarding Public Goods and Externalities
- Non-rivalry and non-excludability are two characteristics of Public Goods
- Market can provide the optimal amount of a good in the presence of externalities
Which of the statements given above is/are correct?
- A 1 only ✓
- B 2 only
- C Both 1 and 2
- D Neither 1 nor 2
✓ Correct answer: (A)
Economy › Macroeconomics
CDS2024
Which one of the following is not correct?
- A The market mechanism over-produces a good that generates positive externality. ✓
- B A cap and trade of pollution permits can be used by the government to achieve the social optimum.
- C The optimal amount of subsidy in the case of an activity that produces a positive externality is the difference between the social benefit and the private benefit at the optimum.
- D Tragedy of Commons is an example of negative externality.
✓ Correct answer: (A)
Economy › Macroeconomics
EPFO2016
Social cost is higher than economic cost because
- A society is bigger than economy
- B society includes polity, while economy does not include it
- C cost borne by bystanders is positive ✓
- D society includes both consumers and producers
✓ Correct answer: (C)
Economy › Macroeconomics
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