1. The price of the commodities shown in figure 3 has changed vastly throughout the year. To begin with, in Jan 2006 all 4 oil and biofuel prices were the same and had an index of 100, however, during the course of the year, this changed. The corn (yellow) increased in index number and ended to be in 200 whereas in its development in started decreasing. On the other hand, crude oil was the complete opposite. It began increasing in July 2006 was the highest of all four and then ended to be lowest of them all. Furthermore, the second highest by Feb 2007 was Palm oil (made in Malaysia) which had a constant increase throughout the year. To finish off, Wheat made in Kansas had a fairly stable growth in price compared with the others and ended to be below 120 index of oil and biofuel prices. 2. Rationing, signalling and incentive functions may help in many ways in order to allocate resources in the market for different biofuels and related markets. First of all, if there is a high price of a biofuel this would mean that their supply is fairly limited which would mean these biofuels wou......

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