Pareto optimality is a situation where
A)it is possible to make any person better off without making at least one person worse off
B)every individual has reached their maximum utility
C)each individual can make the optimal choice to maximize their utility
D)every individual remains at their endowment point.
E)any improvement in one person's utility must lead to a reduction in another person's utility.

Question

Quizplus · Accepted Answer

Pareto optimality is a concept in economics where an allocation of resources is considered efficient if no individual can be made better off without making at least one other individual worse off. This means that any improvement in one person's utility under a Pareto optimal state would necessitate a reduction in another person's utility, as described in option E.

Pareto Optimality Is a Situation Where