Unit 9: Non Renewable Resources Ch.17 Flashcards
What is Physical Supply
total amt available: finite but not known
What is ECONOMIC RESERVES
known reserves that can be extracted profitably based on prices and technology
What changes Economic Reserves
-Extraction
-New Resources Discovered
-Changing Price and Tech
What is SUBECONOMIC RESERVES
cost of extraction too high to make production worthwile at current prices
What are IDENTIFIED RESERVES
Quantity/ Quality already known with varying confidence
What are the 4 Types of Identified Reserves
Demonstrated Reserves
Inferred Reserves
Hypothetical / Speculative Reserves
What is the STATIC RESERVE INDEX
Reserves/ Current rate of use per year
-estimates resource lifetime
Why is the Static Reserve Index unreliable
-Geologic/Economic Dimensions could be expanded
-could expect demand to grow
What might influence demand
-Substitution
-Consumption Patterns
-Recycling
What is the EXPONENTIAL RESERVE INDEX
Assumes consumption will grow over time
What determines rate of extraction & use of nonrenewable resources
Scarcity Rents
Price Taker
What influences firms production decisions
-future price and costs
-prevailing interest rates
What is RESOURCE USE PROFILE
consumption rates for resource over time
What is PRICE PATH
price of resource over time
What is EXTRACTION PATH
extraction of a resource over time
What is CHOKE PRICE
Quantity demanded = 0
What are the 4 Stages off extraction
1) High quality/ Abundant supplies
–prices decrease/ extraction increases
2) Prices Stable
–increasing demand = increase discovery & tech
3) Demand Increases/ Supply Limitations
–price rises/ tech can’t keep up
4) Choke Price
–rising prices/ decrease demand
–substitution/ recycling
Why have resources prices DECREASED while consumption has INCREASED
Continual discovery
Improved extraction tech
Substitution
What is most likely to disrupt resource supply
Geopolitics
Resource Nationalism
Strikes/ Accidents
What are 2 Environmental Impacts of Mining
Tailings
Smelting
What is a BACKSTOP RESOURCE
Substitute resource that becomes viable alternative when initial resource reaches too high of a price
What is the SECOND LAW OF THERMODYNAMICS
loss or degradation of material will always occur during process of fabrication/ use/ recycling
-recycling requires new input of energy
How is entropy and energy related
Increase in Entropy = Decrease in Available Energy
Economically optimal level of Recycling
When Marginal Private cost of Virgin Resource = Marginal Cost of Recycling
What is the Socially Optimal Level of Recycling
Marginal costs of recycling = marginal social cost of virgin resource
-this takes externality into account
What are policies that promote mineral recycling
1)altering public policies that encourage rapid resource extraction
2)impose tax on primary resources
3)market incentives for recycling
–gvt procurement
–tax incentives
–R&D
4)Manufacturer take-back responsibility
5)Social changes
