Authors
1 Full Professor of Islamic Azad University, Isfahan Branch (Khorasgan)
2 M.A in Economics
Abstract
The decision on how to allocate resources among the production of commodities and among the organizations that produce them is the main issue of economics and it is important for both developed and developing countries.
By considering the problems of international trade and the scarcity of foreign exchanges optimum allocation of resources is even more crucial for developing countries.
Since the relative advantage theory is the foundation of international trade, relaying on it for exporting goods is one way to overcome the aforementioned problems.
Statistical data indicates that during the last few years by increasing domestic production of cement, its import has declined and now the country needs to find foreign markets for its exports. The province of Isfahan has two important cement plants and it is a good case for analyzing the mentioned problems. The paper’s findings indicate that the Isfahan Province has a relative advantage in the production of cement. The price analysis shows that the DRC (Domestic Resource Cost) is elastic in response to a reduction in cement world prices and it is inelastic with respect to the changes in foreign exchange rate.
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