Shell is one of the world’s largest oil companies. The company makes products such as petrol and diesel from crude oil. Crude oil is unrefined oil that is found occurring naturally in deposits within the earth. To produce the petrol that people buy from garages Shell must first extract the crude oil from the earth. The company does this by drilling oil wells, many of which are under the sea.
Question:1. What does Shell produce? (>)
2. Where can you buy Shell’s product? (>)
3. What is Shell’s product made from? (>)
1.1 Activity
Think carefully about the following product and answer the questions: (a) a loaf of bread (b) an oak coffee table and (c) this book.
1. What are the materials that each product is made of? (>)2. Where do these raw materials come from? (>)
3. Is society keeps using these raw materials will they eventually run out? Explain your answer.(>>>)
Business in context 2
Throughout the world, the demand of petrol and diesel is enormous. Without petrol or diesel people could not travel anywhere in their cars, either on business or for pleasure, and goods could not transported to shops and costumers. People and other businesses are therefor willing to pay for the petrol or diesel that Exxon and other oil companies produce, even though they often complain about the price!
However, think about some of the things you buy regularly - for example clothes or food. The companies that produce these products do so because there is an effective demand for them - enough people are prepare to buy the at their current prices. But think what might happen if price of these products increased. How much would you be prepared to pay them? At what price would you reduce the amount you bought? At what price would you stop buying them all together? What does this tell you about these companies and their products?
Resource: Chris J. Nuttall, IGCSE Business Studies, Cambridge University 2002
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