A given allocation in Edgeworth box is Pareto- optimal if:
A)it belongs to one of the sides.
B)it belongs to one of the diagonals of the box.
C)two indifference curves are tangent at that point.
D)two indifference curves intersect in that point.

Question

Quizplus · Accepted Answer

A Pareto-optimal allocation is one where no individual can be made better off without making someone else worse off. This occurs when two indifference curves are tangent at the allocation point, as any movement away from this point would result in making one individual worse off without making the other better off. Therefore, option C is the best choice.

A Given Allocation in Edgeworth Box Is Pareto- Optimal If