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Mineral Resources

  1. Mar 13, 2005 #1
    Scarcity of minerals does NOT raise the price of material goods much because

    A. investment capital is usually abundantly available
    B. all resource supplies are theoretically infinite
    C. the mining industry is fiercely competitive and poorly regulated
    D. raw materials typically account for only a small fraction of consumer good prices
    E. none of the above

    I don't quite understand A, and I think D is wrong (we need cobalt and other metals for cars and other things consumers purchase), along with B. So I'm left with C or E. Is my reasoning incorrect so far? What's the right answer?

  2. jcsd
  3. Mar 14, 2005 #2
    Because minerals {held in futures} are judged by by a long-term demand forecast, its a fairly stable market. They know how much of the minerals are available. Knowing where they're mined and how much the mine is producing is the key to the stable market. Despite normal consumer demands prices don't change much.
    answer D
  4. Mar 15, 2005 #3
    Obviously, that doesn't include petroleum. I would go so far as to say that all products that use it, their prices go up.
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