International trade does not occur if value decreases and transportation cost rises.

Product – is everything that can be supplied at the market to be used or consumed satisfying a particular need or a want. Usually the product assumes the physical substance, however, services also can be considered as a product. Sometimes, the term product can be substituted for resource or supply. Products can be:

• Non-durable
• Durable

Classification of products:

• Consumer products

- convenience products

- shopping products

- specialty products

- unsought products

• Industrial products

- materials and parts

- capital item

- suppliers and services

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All products have utility

• Utility

- total utility

- marginal utility

Two types of problems:

• Maximization of utility for given expenses
• Minimization of expenses for given utility

Mathematically both problems suggest a problem for finding maximum or minimum of a function of two variables if the variables match condition .These problems should be solved in a following way (Lagrange method):

1) Pose rightly function and condition and equalize condition to zero. Construct Lagrange function for given data:

2) Find partial derivatives and construct a system of equations:

3) The solution to system is the answer.

Questions.

1. Describe the concept of flow of goods and resources.
2. Name main types of markets and describe why trade occurs?
3. How international trade differs from domestic concerning tradability of goods?
4. Describe classification of products.
5. Describe Smith’s paradox.

Preference	Предпочтение
Product	Товар
Non-durable product	Товар краткосрочного пользования
Durable product	Товар долговременного пользования
Convenience product	Товар повседневного спроса
Shopping product	Товар предварительного выбора
Specialty product	Товар особого спроса
Unsought product	Товар пассивного спроса
Materials and parts	Материалы и комплектующие
Capital item	Капитальное имущество
Suppliers and services	Вспомогательные материалы и услуги
Total utility	Общая полезность
Marginal utility	Предельная полезность
Lagrange method	Метод Лагранжа
Partial derivative	Частная производная

Glossary

Дата добавления: 2015-11-14