Question

True or false?

Every allocation on the contract curve is Pareto optimal.

Answer 1

An efficient distribution is that distribution where We can't make any one better off without making anyone else worse off.

The set of all Pareto optimal allocations is the Pareto set. It is a curve that connects all the Pareto optimal allocation points in the Edgeworth box from one origin to the other origin. The part of the Pareto set where both users do at least as well as at their initial endowments is called the contract curve

If means along contract curve distribution of goods is Pareto efficient.

Therefore,It is True that Every allocation on Contract Curve is Pareto optimal