All the possible utility levels associated with the Pareto-optimal allocation for each product mix point on the production possibilities frontier is known as the utility possibilities frontier.

Question

Quizplus · Accepted Answer

This statement accurately describes the concept of a utility possibilities frontier. It represents all the possible combinations of utility levels that can be achieved by the two goods being produced, given the constraints of the production possibilities frontier. Each point on the utility possibilities frontier corresponds to a Pareto-optimal allocation of the two goods.

All the Possible Utility Levels Associated with the Pareto-Optimal Allocation