Econmoic Concepts behind the uk oil industry

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1.Explain the following economic concepts in the context of the UK oil industry:

a) Economic Resources

b) Specialisation

c) Money and Exchange

d) Markets

A. There are four types of resources available for use in the production process. These are land, labour, capital and enterprise or entrepreneurship. These resources are called the factors of production.


With land it doesn’t only deal with the actual land itself but all the natural resources about and below the land and sea. Land is split up into two types of resources, these are renewable and non-renewable, which then filter down further into sustainable and non-sustainable resources. Renewable resources are resources which once used are able to be renewed. For example fish stocks and forests. These are then only sustainable if even with economic exploitation, like fishing and commercial logging, the number of fish and trees don’t diminish or run out. If for example it was found out that under the forest there is a large amount of oil then the forest would be totally cleared to make way for people to dig and collect for the oil. In this case the forest would have ceased to be a sustainable resource. Non-renewable resources are non-renewable in the fact that once used, will never be replaced. Oil is an example of a non-renewable resources as once it has been used, say for fuel for your car, there is no way to again use that fuel. Non-sustainable resources, opposite to sustainable resources are ones in which through economic exploitation, will run out. Oil is again an example as through digging for it and using it to power machines, it will run out.

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Labour is the workforce of an economy. Each worker will have a set of skills which may or may not be as a result of education and training. The value of a worker is called their human capital. Education and training will increase the value of that human capital. So a worker may wish to improve their human capital through education in the hope of gaining remuneration. This is not the only way in which workers will feel that they are worthy of remuneration though. If a companies profits are increasing then workers may feel that so to is ...

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***** The writer demonstrates good understanding of all the economic terms in the question. Application is increased through the essay, making it more specifically related to the UK oil industry. More research into the UK industry would have been useful.