All points on a utility possibility curve are efficient but differ in terms of the distribution of well-being.

Question

Quizplus · Accepted Answer

The utility possibility curve represents all possible combinations of two goods that can be produced with the given resources and technology. All points on the curve are efficient, meaning that it is not possible to produce more of one good without giving up some of the other. However, the distribution of well-being among individuals may differ depending on their preferences and initial endowments. Some points on the curve may yield higher levels of overall well-being than others, but all points are technically efficient.

All Points on a Utility Possibility Curve Are Efficient but Differ