If allocation x is Pareto optimal and allocation y is not, then everyone is at least as well off with x as with y, and someone is better off with x than with y.

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Quizplus · Accepted Answer

Pareto optimality only means that no one can be made better off without making someone else worse off. It does not necessarily imply that everyone is at least as well off with x compared to y, nor that someone is better off with x than with y. Allocation y being not Pareto optimal means there is a potential to make someone better off without making anyone worse off, but it doesn't directly compare the welfare levels of x and y.

If Allocation X Is Pareto Optimal and Allocation Y Is