A)Discuss the main differences between the theory of absolute advantage and comparative advantage.

B) Consider a Petrol/Gas Market and Car Market, both are in equilibrium. Petrol/Gas supplies are sharply reduced because of OPEC decision. How does the OPEC decision affect Petrol/Gas and Car Market. Assume there is no Petrol/Gas substitute. How would you illustrate these changes in the petrol/gas market and in the car market in supply-and-demand terms?

C) The demand and supply schedules for the wheat market are shown in the following table.

Price ($)	Quantity Demanded	Quantity Supplied
0.00	500	0
1.00	450	150
1.50	400	200
2.00	350	250
2.50	300	300
3.00	250	350
3.50	200	400
4.00	150	450
5.00	100	500

1. Graph the demand and supply curves. What is the free -market equilibrium in this market?

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1. Suppose the local government enforces a price floor $3.0. Show in your diagram the effect on price and quantity exchanged.

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1. Suppose the local government enforces a price ceiling $1.5. Show in your diagram the effect on price and quantity exchanged.

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1. Suppose the local government enforces a price ceiling $4.0. Show in your diagram the effect on price and quantity exchanged.

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1. How a good weather and increase in Canada population would affect equilibrium price and quantity of wheat in Canada. Show graphically the effect of these changes on wheat market in Canada.

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