Utility-possibility frontier

Utility-possibility frontier

The Utility-possibility frontier is a concept widely used in Welfare Economics, and analogous to the better-known Production-possibility frontier. It is a similar diagram which depicts not production of two goods, but rather the utility possibilities of two individuals.

In a competitive economy, any allocation over the utility-possibility frontier is a Pareto optimum, as the UPF is a representation of the Pareto contract curve in a different dimension (utilities versus goods).

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