Question

short answer in one line
1) Is absolute advantage or comparative advantage is more important to trade?Explain your reasoning
2) Explain why economists usually oppose control on prices?

Answer 1

1) Comparative advantage is more important because one country can have absolute disadvantage in production of two goods but still both country can benefit by trading and by specialization in a good in which it has less absolute disadvantage.

An economy has comparative advantage in which it has less opportunity cost compared to other. If one country has comparative advantage in one good then other firm will automatically will have comparative advantage in other.

2) Economist usually oppose control on price because it leads to misallocation of reaources which leads to underutilisation of resources.