Question
What would the graph look like Production Possibility Frontier (PPF) graph. On this graph, the x-axis could represent one input (like labor hours) and the
What would the graph look like Production Possibility Frontier (PPF) graph. On this graph, the x-axis could represent one input (like labor hours) and the y-axis another input (like number of cranes). Each point on the frontier represents the maximum output that can be achieved with a given set of inputs. If the cargo port is operating on the frontier, it is technically efficient. If it's operating inside the frontier, it's technically inefficient. 2. Cost Efficiency: This refers to the ability of a firm to produce at the lowest possible cost. A cargo port is cost efficient if it can minimize the cost of handling cargo while maintaining a given level of output. To determine cost efficiency, we can use an Average Cost (AC) curve. On this graph, the x-axis represents quantity of output and the y-axis represents average cost. The curve shows how average cost changes with output. If the cargo port is operating at the minimum point of the AC curve, it is cost efficient. If it's operating anywhere else on the curve, it's not cost efficient. In conclusion, to determine if a cargo port is technically and cost efficient, we need to analyze its operations using the PPF and AC curve. By doing so, we can identify areas of inefficiency and potential improvements.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started