Unstable conditions are produced when the environmental lapse rate is greater than the dry adiabatic rate.

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This is true. Unstable conditions exist when the environmental lapse rate (the rate of temperature decrease with altitude in the atmosphere) is greater than the dry adiabatic rate (the rate at which a parcel of unsaturated air cools as it rises through the atmosphere). This means that the air is cooling faster than it would if it were rising dry adiabatically, and so it continues to rise because it is less dense than the surrounding air. This can result in the formation of clouds, thunderstorms, and other types of severe weather.

Unstable Conditions Are Produced When the Environmental Lapse Rate Is