Mine Economics Flashcards
1
Q
The science that deals with the production, allocation, and use of goods and services.
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Economics
2
Q
It refers to the study of the entire system of economics.
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Macroeconomics
3
Q
The study of how the systems affect one business or parts of the economic system.
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Micro-economics
4
Q
This uses mathematical formula to account for the time value of money and to balance current and future revenues and costs.
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Engineering Economy
5
Q
It is the discipline that applies principles of economic theory to problems involving mineral resources, specially relates concepts and ideas of general economics to the various aspects of the occurrence, exploitation, and final use of minerals.
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Mine Economics
6
Q
These refer to products and services required to support human activities.
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Necessities
7
Q
These are products and services that are desired by humans and are purchased after one obtained its necessities.
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Luxuries
8
Q
Such as food and clothing anything that satisfy human wants and needs.
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Consumer Goods
9
Q
These refer to raw materials and tools; it is used to make consumer goods.
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Capital Goods
10
Q
It refers to the machinery used in the production of commodities from producer goods.
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Capital Goods
11
Q
The performance of any duties or work for another.
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Services
12
Q
This occurs in a situation where a commodity is supplied by a number of vendors with nothing to prevent entry of new vendors in the market.
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Perfect Competition
13
Q
This exists when a unique product is available from a single vendor blocking other vendors from entering the market.
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Perfect Monopoly
14
Q
It exists where there are so few suppliers of a product that action by one will result to an inevitable, similar action to others.
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Oligopoly
15
Q
Mining is an economic activity in that its contribution to the GDP is measure by __________
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its value added (sum of wages, salaries, rent, royalties, direct taxes, interest payments, and gross payments)
16
Q
It refers to the people’s willingness to purchase a product or service.
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Demand
17
Q
It exists when there is a greater change in quantity demanded as a response to a change in price.
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Elastic Demand
18
Q
It exists when there is a lesser change in quantity demanded as a response to a change in price.
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Inelastic Demand
19
Q
It exists when there is an equal change in price and quantity demanded, whether increasing or decreasing.
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Unitary Demand
20
Q
It states that “under conditions of perfect competition, the price at which a given product will be supplied and purchased is the price that will result in the supply and demand being equal.
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Law of Supply and Demand
21
Q
It refers to how many of a certain good/ service are available for purchase.
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Supply
22
Q
It period/graph of the quantity demanded versus the price.
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Demand Curve
23
Q
A plot/graph of the quantity supplied versus the price.
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Supply Curve
24
Q
The schedule or table listing of the quantity demanded with the corresponding price.
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Demand Schedule
25
The schedule or table listing of the quantity supplied with the corresponding price.
Supply Schedule
26
The supply is less than demand
Shortage
27
The supply is exceeding demand.
Supply
28
The supply is equal to the demand.
Equilibrium Point
29
It refers to the difference between the value of the product and the sum of the opportunity costs of all the resources involved in making the product.
Rent
30
This refers to the deindustrialization of a country when the discovery of a natural resource makes the said country dependent on the exploitation and exportation of the said resource to the neglect of manufacturing.
Dutch Disease
31
The practice of estimating and forecasting costs of completing a project with a defined scope.
Cost Estimation
32
A knowledge area which includes planning, monitoring, and controlling a project’s monetary costs.
Project Cost Management
33
A cost method approach where tally costs upward, starting at the bottom and accounting for each expected cost.
Bottom-Up Approach
34
It starts with identifying every major aspect to the project then create labor categories that apply to each task.
Top-Down Approach
35
Costs unaffected by changes in activity level over a feasible range of operations.
Fixed Cost
36
An expense incurred in joint usage which is difficult to assign or identify with a specific cost object or specific unit of output.
Indirect Costs
37
The resource consumed or lost in completing a process which that does not contribute directly to the end product.
Overhead Costs/ Burden Costs
38
These are associated with an operation that vary in total with quantity of output or other measures of activity level.
Variable Costs
39
These are completely attributed to the production of specific goods or services.
Direct Costs/ Direct Expense/ Variable Expense
40
A representative costs per unit of output that are established in advance of actual production and service delivery.
Standard Cost
41
These are additional costs that results from increasing the output of a system by one or more units.
Incremental Cost/ Incremental Value/ Marginal Cost/ Marginal Revenue
42
These are repetitive and occurs when a firm produces similar goods and services on a continuous basis.
Recurring Costs
43
These involves payment in cash and results in a cash flow.
Recurring Costs
44
It does not involve cash transaction.
Book Cost
45
These occurs in the past and has no relevance to estimates of future costs and revenues to an alternative.
Sunk Cost
46
These are costs of the best rejected (foregone) opportunity and is either hidden or implied.
Opportunity Cost
47
It refers to the summation of all costs, both recurring and non-recurring, related to a product, structure, system or service during its life span.
Life Cycle Cost
48
The capital required for most activities of the acquisition phase.
Investment Cost
49
These include many of the recurring annual expense items as associated with the operation phase of the life cycle.
Operation and Maintenance Cost
50
These include non-recurring costs shutting down the operation.
Disposal Cost
51
It refers to the return of capital or cost of using capital; amount paid for the use of borrowed capital or the income produced by money which has been loaned.
Interest
52
This assumes that each month has 30 days/month and 360 days/year.
Ordinary Interest
53
This uses the exact number of days per month.
Exact Simple Interest
54
It refers to an interest for an interest period (interest on top of an interest).
Compound Interest
55
It refers to the the cost of borrowing money.
Rate of Interest
56
It specifies the rates of interest and a number of interest periods in one year.
Nominal Rate of Interest
57
It is an actual or exact rate of interest on the principal during one year.
Effective Rate of Interest
58
It refers to the difference between the original amounts owed in the present and the amount that has to be paid in the future to settle the debt.
Discount
59
It refers to the increase in the prices for goods and services from one year to another, thus decreasing the purchasing power of money.
Inflation
60
It refers to the series of annual cashflows occurring each period over a range of period.
Annuity
61
It refers to the series of equal payments or receipts occurring over a specified number of periods with the payments or receipts occurring at the end of each period.
Ordinary Annuity/ Annuity-Immediate
62
An ordinary annuity where the first cash flow of the series is made several periods after the beginning of the annuity.
Deferred Annuity
63
It refers to one where the payments are made at the beginning of each period. It is a series of uniform cash flows that occur at the beginning.
Annuity Due
64
The uniform payments which are done infinitely.
Perpetuity/ Perpetual Annuity
65
The first payment is done one period after the focal date.
Ordinary Perpetuity
66
The first payment is done several periods after the focal date.
Deferred Perpetuity
67
It refers to the decrease in value of a fixed product asset or the value of physical property with the passage of time.
Depreciation
68
It refers to the most present worth of all the future profits that are to be received through the ownership of a particular property.
Value
69
The amount which a willing buyer will pay for the property where each has equal advantage and is under no compulsion to buy and sell.
Market Value
70
The property’s worth to the owner as an operating unit.
Utility Value of a Property
71
The value which is usually determined by the disinterested third party in order to establish a price fair for both seller and buyer.
Fair Value
72
The worth of the property depreciated and shown in accounting records.
(Depreciated) Book Value
73
The price that can be obtained from the property after it has been used.
Salvage Value/ Re-sale Value
74
The price that can be recovered if an asset is disposed as a junk.
Scrap Value
75
The year when scrap and book values are equal.
Salvage Year
76
The depreciation due to the wear and tear of the asset.
Physical Depreciation
77
The depreciation due to obsolescence of the asset.
Functional Depreciation
78
It is the decrease in the value of a property due to the gradual extraction of its contents.
Depletion
79
A depreciation due to changes in price level.
Monetary Depreciation
80
The parts may be obsolete for repair or physical duration may be a factor, or the equipment may be hard to come by.
Obsolescence
81
The length of time which it is capable of performing the function for which it was designed and manufactured.
Physical Life
82
It refers to the actual time frame an asset provide value.
Absolute Physical Life
83
The length of time which the property may be operated at a profit.
Economic Life
84
It is computed where the depreciation is constant and the interest rate is neglected.
Straight-line Method
85
It is where the net book value at the end of each period is computed by computing the market price being multiplied by a fixed percentage repeatedly until it reaches the salvage value.
Declining Balance Method/ Matheson's Formula/ Reducing Balance Method
86
It is similar to the declining balance method however the rate of depreciation is replaced by 2 divided by the economic life.
Double-declining Balance Method
87
This presents the idea of annuity in computing for the depreciation. The interest rate for the worth of money is being considered so as to have the depreciable value.
Sinking Fund Method
88
The functionality period and the period the machine has been used is considered. It is computed based on the wear and tear of the machine.
Hour-Output Method
89
It is similar to the hour-output method, this method is based on how much the asset has been used.
Service-Output Method
90
These are resource inputs of businesses or firms before the onset of production of goods and services.
Capital
91
Itis owned by individuals who have invested their money or property in a business project or venture in the hope of receiving a profit.
Equity Capital
92
This is obtained from lenders for investment, both the lender and the lendee expect interest or profit in the future.
Debt Capital/ Borrowed Money
93
One in which a company owned and run by one individual and where there is no legal distinction between the owner and the business.
Individual Ownership/ Sole Proprietorship
94
An association of two or more persons for the purpose of engaging in business for a profit.
Partnership
95
It is fictitious yet recognized by law which can engage in almost any type of business transaction in which a person could occupy themselves.
Corporation
96
It represents ordinary ownership without special guarantees in return.
Common Stock
97
It is guaranteed a definite dividend on their stocks.
Preferred Stocks
98
It is a certificate of indebtedness of a corporation usually for a period of not less than 10 years and guaranteed by mortgage on certain assets of the corporation or its subsidiaries.
Bonds
99
The amount stated on the bond. When the face value has been repaid, the bond is said to have been retired or redeemed.
Face-value of a Bond
100
It refers to the interest rate quoted in the bond.
Bond Rate
101
It is the present worth of all future amounts that are expected to be received through ownership of the bond.
Bond Value
102
The name of owner of this bond is recorded on record books of the corporation and interest payments are sent to the owner periodically without any action.
Registered Bond
103
A coupon is attached to the bond for each interest payment that will come due during the life of the bond.
Coupon Bond
104
The mortgage is the security behind this bond upon certain specified assets of the corporation in the form of a trust deed.
Mortgage Bond
105
It refers to stocks/ bonds of a well-established subsidiary of the corporation.
Collateral Bond
106
A bond without any security behind it except a promise to pay the issuing corporation.
Debenture Bond
107
It refers to the the rate on the unpaid balance of borrowed money or the rate earned on the uncovered balanced of an investment.
Rate of Return
108
This involves finding the equipment end-of-product value of each alternative. The periods are usually in years.
Annual Cost Method
109
The equivalent annual cost of obtaining the asset plus the salvage.
Capital Recovery
110
It involves finding the equivalent value of each alternative at the present time, identified as the time 0.
Present Worth Method
111
It involves finding the equivalent value of each alternative at the future time, identified as time N.
Future Worth Method
112
The length of time required to recover the first cost of an investment from the net cash flow produced by that investment rate of zero.
Payback Period
113
The price an asset would be exchanged for the parties being a willing buyer and seller where the valuation should always base from.
Fair Market Value
114
The cash-flow resulting from a financial model is discounted at an appropriate rate to yield a net present value.
Income (Cash-flow) Approach
115
It develops a value based on recent related transactions.
Market-related Approach/ Comparable Sales Approach Method
116
It is used for publicly traded companies or from recent transactions.
Market Multiples Valuation
117
This method puts a value on finding another similar mineral property and replacing similar infrastructure that previously existed.
Replacement Cost Valuation
118
This is only used to value company with multiple operations rather than an individual property.
Option/ Real Option Pricing
119
It is a method of analysis based on the use of random numbers and probability statistics to investigate problems with variable potential outcome.
Monte-Carlo Simulation
120
An order-of-magnitude technical and economic study of the potential viability of mineral resources which includes appropriate assessments of realistically assumed modifying factors
Scoping Study
121
A comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method has been established and an effective method of processing has been determined.
Pre-Feasibility Study
122
The length of time which the property may be operated at a profit.
Economic Life
123
The expected lifespan of an asset.
Useful Life
123
A comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessment of applicable modifying factors.
Feasibility Study/ Bankable Study/ Definitive Feasibility Study
