ABSTRACT
This chapter investigates the role minerals play in production and the economy and describes how an efficient market in recyclable, depletable resources would work. A profit-maximizing firm will undertake exploration activity until the marginal discovery cost equals the marginal scarcity rent received from a unit of the resource sold. Technological progress reduces the cost of ore through new ways to extract, process, and use it. Potentially recyclable waste can be divided into two types of scrap: old scrap and new scrap. New scrap is composed of the residual materials generated during production. E-waste is the fastest-growing segment of the waste stream, bringing with it rising concerns about the environmental and health effects of some of this waste. The efficient role for government in achieving a balance between the economic and environmental systems requires less control in some areas and more in others, and the form of that control matters.
