Quiz 1

Question 1

A new process combines iron ore and a readily available substitute mineral to produce steel. How might this impact the production function for steel?

Select one:
a. Average physical product of labor would likely decrease
b. Diminishing returns will occur more quickly due to an inferior input.
c. A change in the mix of inputs alters the production function.
d. Technological change alters the nature of the production function.

Answer 1

c. A change in the mix of inputs alters the production function.

Question 2

A sudden labor strike disrupts a major nickel mine. Due to nickel’s wide industrial uses, it has few close substitutes. How will this likely affect the market?

Select one:
a. Equilibrium price will increase, potentially with decreased quantity traded.
b. Limited effect, as nickel’s demand curve is likely price elastic.
c. Equilibrium quantity will increase, with potential for lower prices.
d. No significant impact, as marginal benefit is the primary demand driver.

Answer 2

a. Equilibrium price will increase, potentially with decreased quantity traded.

Question 3

A mining company discovers a promising mineral deposit in a remote location. Which of these is a major uncertainty in determining its economic feasibility?

Select one:
a. The environmental regulations in the area of the deposit.
b. The optimal processing technology for extracting the mineral.
c. The ore’s average grade and potential variability across the deposit.
d. The availability of a skilled workforce in a remote location.

Answer 3

c. The ore’s average grade and potential variability across the deposit.

Question 4

A popular online forum is buzzing with forecasts of future shortages in cobalt, a mineral essential for electric vehicle batteries. How might this affect the current cobalt market?

Select one:
a. Decreased selling pressure, causing the equilibrium price to increase.
b. Decreased buying pressure, causing the equilibrium price to decrease.
c. Increased selling pressure, causing the equilibrium price to decrease.
d. Increased buying pressure, causing the equilibrium price to increase.

Answer 4

d. Increased buying pressure, causing the equilibrium price to increase.

Question 5

A jewelry designer releases a new, highly sought-after collection featuring rare gemstones. How is this likely to impact the market for those gemstones?

Select one:
a. Change in nonprice factors leading to a shift of the supply curve to the right.
b. Change in nonprice factors leading to a demand curve shift to the left.
c. Change in consumer preferences leading to a demand curve shift to the right.
d. Change in consumer preferences leading to a supply curve shift to the left.

Answer 5

c. Change in consumer preferences leading to a demand curve shift to the right.

Question 6

The price of aluminum, a key substitute for steel, has significantly increased. What impact is this likely to have on the steel market?

Select one:
a. Decreased supply of steel, shifting the supply curve left.
b. Increased supply of steel, shifting the supply curve right.
c. Increased demand for steel, shifting the demand curve right.
d. Decreased demand for steel, shifting the demand curve left.

Answer 6

c. Increased demand for steel, shifting the demand curve right.

Question 7

A government concerned with pollution from lead mining implements a strict environmental tax. Considering the principle of utilitarianism, this action suggests:

Select one:
a. The total social cost of lead production outweighs its benefits.
b. The government believes consumers have a high marginal benefit from lead products.
c. The lead market is likely experiencing a situation of oversupply.
d. The government is prioritizing the well-being of lead producers.

Answer 7

a. The total social cost of lead production outweighs its benefits.

Question 8

A mining company invests heavily in new drilling equipment. How would this likely change its production function for a given mineral?

Select one:
a. The marginal physical product would increase at low levels, then diminish more rapidly.
b. The marginal physical product would increase at most levels of input.
c. The marginal revenue product would increase at most levels of input.
d. The average physical product would fall at most levels of input.

Answer 8

b. The marginal physical product would increase at most levels of input.

Question 9

A mining company has drilled several holes in an area known for gold mineralization. Results suggest a potential deposit, but drill spacing is wide. This deposit likely falls into which category?

Select one:
a. Indicated resource.
b. Proven reserve.
c. Inferred resource.
d. Measured resource.

Answer 9

a. Indicated resource

Question 10

Historical data indicates a strong correlation between economic growth and the demand for iron ore. This suggests the demand for iron ore is likely:

Select one:
a. Created through extensive mineral exploration campaigns.
b. Derived from the demand for goods that use iron ore.
c. Perfectly price inelastic.
d. Related to consumer preferences based on cultural values.

Answer 10

b. Derived from the demand for goods that use iron ore.

Question 11

An early-stage exploration project reveals scattered high-grade drill results within a geologically complex area. This situation likely exhibits:

Select one:
a. Low geological assurance and low economic feasibility.
b. High geological assurance and low economic feasibility.
c. High geological assurance and high economic feasibility.
d. Low geological assurance and uncertain economic feasibility.

Answer 11

d. Low geological assurance and uncertain economic feasibility.

Question 12

Within a known mineral deposit, areas with the lowest confidence level in the continuity and grade of mineralization would be classified as:

Select one:
a. Possible reserves
b. Proven resource
c. Probable reserves
d. Inferred resource

Answer 12

c. Probable reserves

Question 13

A geological survey outlines a large area with potential for copper mineralization, but no specific deposits have been located. This resource would best be classified as:

Select one:
a. Identified resource.
b. Speculative resource.
c. Undiscovered resource.
d. Hypothetical resource.

Answer 13

b. Speculative resource.

Question 14

Which distinction is true between an “ore reserve” and a “reserve base”?
Select one:

a. Reserve base uses stricter geological confidence criteria than ore reserves.
b. Reserve base is a historical term, ore reserve is the modern equivalent.
c. Ore reserves include sub-economic material, reserve base is limited to profitable ore.
d. Reserve base excludes material currently mineable, while ore reserves include it.

Answer 14

c. Ore reserves include sub-economic material, reserve base is limited to profitable ore.

Question 15

A change in any of these factors could alter the classification of resources and reserves for a mineral deposit EXCEPT:

Select one:
a. Fluctuations in the commodity’s market price.
b. Advances in mineral exploration techniques.
c. New regulations governing mining operations
d. The passage of time without further geological work.

Answer 15

d. The passage of time without further geological work.

Question 16

On the McKelvey diagram, which change would move a mineral deposit towards greater economic potential?
Select one:

a. A shift to the right as economic feasibility increases.
b. A shift downward as geological knowledge decreases.
c. A shift upward as geological knowledge increases.
d. A shift to the left as economic feasibility decreases.

Answer 16

a. A shift to the right as economic feasibility increases.

Question 17

A distinction between “resources” and “reserves” is that:

Select one:
a. Resources cannot be profitably extracted, while reserves can.
b. Resources are geologically indicated or inferred, reserves are measured with higher confidence.
c. Resources are naturally occurring, reserves are synthetic materials.
d. Resources are geologically confirmed, reserves are a subset with immediate mining potential.

Answer 17

b. Resources are geologically indicated or inferred, reserves are measured with higher confidence.

Question 18

The price of palladium, a substitute mineral for platinum in catalytic converters, significantly decreases. How will this likely affect the platinum market?

Select one:
a. Increased demand for platinum, shifting the demand curve to the right.
b. Decreased supply of platinum, shifting the supply curve to the left.
c. Decreased demand for platinum, shifting the demand curve to the left.
d. Increased supply of platinum, shifting the supply curve to the right.

Answer 18

c. Decreased demand for platinum, shifting the demand curve to the left.

Question 19

A new, highly efficient process for extracting copper from ore has been developed. How is this likely to impact the market for copper?

Select one:
a. The market demand curve for copper will shift to the right.
b. The market supply curve for copper will shift to the left.
c. The market supply curve for copper will shift to the right.
d. The market demand curve for copper will shift to the left.

Answer 19

c. The market supply curve for copper will shift to the right.

Question 20

A producing mine with a long history of operation wants to update its ore reserve estimations. Which of these is critical for addressing the cyclic ore reserve problem?

Select one:
a. Re-sampling areas within the currently active mine workings.
b. Analyzing historical production records and sales data.
c. Conducting drilling in areas peripheral to the existing mine.
d. Using advanced geophysical techniques to scan the deposit.

Answer 20

a. Re-sampling areas within the currently active mine workings.