Based on the information in the map, Nigeria controls a large part of the oil in Africa which is why they have such a high GDP compared to Kenya and DR Congo. True/False

Question

If an oil company has been losing money for years when they were trying to drill for the oil, transport it to their factory, and then process it into oil that can be sold to other countries , but now they decide to sell the old oil drilling equipment and pipelines to move the oil, and instead just invest in new updated equipment for the processing factory. What does this tell us about the company?
a.They invested in human capital
b.They decided to specialize.
c.They invested in entrepreneurship.
d.None of the above

Answer 1

Based on the information provided:

1. It is True that Nigeria has significant oil reserves and production, contributing to its higher GDP compared to countries like Kenya and the Democratic Republic of Congo.

2. Regarding the situation with the oil company:

   • The company is choosing to shift its focus from drilling and transportation to processing. This indicates a decision to concentrate on a specific area of their operations where they may find better profitability. Therefore, the correct answer is: b. They decided to specialize.