Final answer:
Iceland sits atop a divergent plate boundary where the Eurasian Plate and the North American Plate are moving apart, causing volcanic activity and the formation of new crust.
Step-by-step explanation:
Iceland sits atop a divergent boundary. In divergent boundaries, plates are moving away from each other. In the case of Iceland, the Eurasian Plate and the North American Plate are moving apart, causing magma to rise to the surface and form new crust. This volcanic activity is responsible for the unique geological features of Iceland, such as its volcanoes and geothermal activity.