#1
Which of the following is a primary economic consideration for mineral extraction?
Market demand
ExplanationMarket demand drives the economic viability of mineral extraction projects.
#2
What is the concept that describes the value added to a mineral resource as it moves through the stages of production and distribution?
Value chain
ExplanationValue chain refers to the process of increasing value from extraction to distribution of mineral resources.
#3
Which economic theory suggests that when the price of a mineral resource rises, the incentive to develop substitutes increases?
Substitution effect
ExplanationThe Substitution effect theory posits that rising mineral prices spur the development of alternatives.
#4
Which economic indicator is used to measure the profitability of a mineral extraction project?
Return on Investment (ROI)
ExplanationROI measures the profitability of mineral extraction projects.
#5
What is the term for the process of determining the economic feasibility of extracting a mineral resource?
Feasibility study
ExplanationFeasibility study assesses the economic viability of mineral extraction.
#6
Which economic term refers to the additional cost of extracting one more unit of a mineral resource?
Marginal cost
ExplanationMarginal cost denotes the extra expense of extracting additional units of a mineral resource.
#7
What is the primary determinant of the price elasticity of demand for mineral resources?
Availability of substitutes
ExplanationPrice elasticity of demand for minerals is primarily influenced by substitute availability.
#8
In the context of mineral extraction, what does the term 'net present value' (NPV) represent?
The value of future cash flows from the project, discounted to present value
ExplanationNPV quantifies future cash flows from mineral extraction, adjusted for present value.
#9
Which economic concept refers to the total quantity of a mineral resource that is economically viable to extract?
Reserve base
ExplanationReserve base indicates the amount of mineral resources economically feasible for extraction.
#10
Which economic theory suggests that the depletion of mineral resources leads to higher prices, incentivizing the exploration of new reserves and development of substitutes?
Hotelling's rule
ExplanationHotelling's rule posits that depletion increases prices, driving exploration and substitution.
#11
What is the primary factor influencing the economic viability of deep-sea mining projects?
Mineral concentration in seabed deposits
ExplanationThe concentration of minerals in seabed deposits determines the economic feasibility of deep-sea mining.
#12
Which economic concept refers to the tendency for the costs of mineral extraction to increase over time as easily accessible resources are depleted?
Escalating costs paradigm
ExplanationEscalating costs paradigm describes rising extraction costs as easily accessible resources diminish.
#13
What economic principle suggests that the extraction rate of a mineral resource should be proportional to its scarcity?
Hotelling's rule
ExplanationHotelling's rule proposes extraction rate proportional to mineral scarcity.