Question

A country’s comparative advantage in the extraction of commodities most likely stems from its ?

Answer 1

A country's comparative advantage in the extraction of commodities most likely stems from its: 1. high labour to capital ratio.

Answer 2

Answer:

A country’s comparative advantage in the extraction of commodities most likely stems from its ?

high labor ratio

Explanation:

• A country’s comparative advantage in the extraction of commodities most likely stems from its high labor ratio.
• The capital labor ratio (K/L) can measure the capital intensity of a firm, Typically over time firms tend to have a higher capital labor ratio as they seek to gain productivity improvements from investment in capital and automating the production process.
• Capital Labor Ratio is a measure of amount of capital employees to evert unit of labor employed in the economy.
• In socialist economics, an indicator that characterizes the quantity of fixed production assets in branches of material production on aper- week basis.
• The ratio is obtained by dividing the book value of these assets for a given year by the number of workers employed during that year.
• To produce effectively, labor must be supplied with materials to work upon and be aided by shelter, tools, machinery and other productive appliances.
• All of these require capital, that is, an accumulation of previous earnings.

Hence, a country’s comparative advantage in the extraction of commodities most likely stems from its ?

high labor ratio