© 2009 David Gustafsson

International trade

So! Now I have completed the first class in international trade. How was it? Well, I must say that it was a very good teacher and a structured course. Kind of the opposite to the international project management course. The international trade course is given by Australian school of business, that is kind of classy with high standard premises. We got the course outline and lecture notes printed. Everything was perfect except for that the course seemed demanding! I do not really have the prerequisites for it since I am not from a business background. Our studies at industrial engineering and management are more into managing operations and that type of economics.

Of course I have heard of the Cobb Douglas function, utility curves and production probability function, but I do not use the terms and models gracefully. Did you for example know that if:

[pmath size=12] max (c_1,c_2) U(c_1,c_2) =max (c_1,c_2) b_1 * log c_1 + b_2 * log c_2 [/pmath]

Under the constraint:

[pmath size=12] P_1 * c_1 +P_2 * c_2 =w*l[/pmath]

Has the solution

[pmath size=12] c_1 =(b_1/(b_1+b_2)) * wl/P_1[/pmath]

Me neither! This is due to some characteristics of the Cobb-Douglas utility function. Probably I will manage to learn everything and go through the course, but it will be demanding. I aslo question if I will have use for it. Maybe, maybe not? The conclusion is to not decide until friday when the second class of international project management is given.