1.Assume the world price of petroleum is $400 a gallon. And assume if Malaysia does not trade internationally, and the equilibrium price of petroleum is $200 a gallon. Answers the following questions when Malaysia begins to trade internationally:

(a)How does the price of petroleum in Malaysia change?

(2 marks)

(b)How does the quantity of petroleum produce/supply in Malaysia change?

(2 marks)

(c)Does Malaysia export or import petroleum and why?

(2 marks)