Theory Thursday! Utility Possibility Frontier
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It’s that time of the week again where I introduce some economic theory that is beyond the scope of the A-level course, but will certainly get keen students thinking about wider applications of their economics. In last week’s post on using indifference curves to analyse choices made by individuals, I thought it would be interesting to take a look at why people choose to live in household, and how this affects their decision-making.
One of the tools that we can use to look at this is the utility possibility frontier - this is really quite similar to a production possibility frontier, which most A-level students will have met by this point in their course. The utility possibility frontier shows all of the possible combinations of utility (or ‘satisfaction’) that can be achieved by both partners in the household, and can be used to illustrate whether either partner gets any satisfaction from caring about the other, and who holds the relative bargaining power in the relationship.
I’ve included a link to a presentation that students and teachers can work through which outlines some of the core economic concepts relating to living in households, and the decision-making that takes place within those households.
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