Question

Q. A country's comparative advantage in the extraction of commodities most likely stems from its: A. high labour to capital ratio. B. large amount of natural resources. C. specialisation in capital intensive products.​

Answer 1

Answer:

B. large amount of natural resources

Explanation:

Comparative advantage is a country's ability to produce a product or service for a lower opportunity cost than rival countries.  Opportunity costs are the benefits given up in the extraction process. If a  country has a large amount of natural resources, it will use fewer resources in the extraction process than other countries. The trade-off costs will be so little compared to the benefits.

Other countries will find it cheaper to import from a country with large natural resources. For example, oil-rich nations have a comparative advantage in the extraction and processing of oil and oil by-products.