$100 is to be divided among two individuals-Mary and Jenna.Which of the following allocations is Pareto efficient?
A) Mary receives $45, and Jenna receives $45.
B) Mary receives $20, and Jenna receives $75.
C) Mary receives $1, and Jenna receives $99.
D) Mary receives $90, and Jenna receives $9.

Question

Quizplus · Accepted Answer

A Pareto efficient allocation means that no individual can be made better off without making someone else worse off. In option C, any attempt to give Mary more would require taking from Jenna, making Jenna worse off, thus it's Pareto efficient.

$100 Is to Be Divided Among Two Individuals-Mary and Jenna