healthcare and education along the production possibilities frontier—as a ray (line) from the origin to a specific

point on the PPF. Output mixes that had more healthcare (and less education) would have a steeper ray, while

those with more education (and less healthcare) would have a flatter ray.

Allocative efficiency means that the particular combination of goods and services on the production

possibility curve that a society produces represents the combination that society most desires. How to

determine what a society desires can be a controversial question, and is usually a discussion in political

science, sociology, and philosophy classes as well as in economics. At its most basic, allocative efficiency

means producers supply the quantity of each product that consumers demand. Only one of the productively

efficient choices will be the allocatively efficient choice for society as a whole.

Why Society Must Choose
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