-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Point a is NOT Pareto efficient because

Question

Quizplus · Accepted Answer

At point a, if Al's Marginal Rate of Substitution (MRS) exceeds Bruce's MRS, it means that the two individuals value the goods differently, and there is an opportunity for them to trade in a way that could make at least one person better off without making the other worse off. This situation indicates that point a is not Pareto efficient, as Pareto efficiency is achieved when no individual can be made better off without making someone else worse off. The location of the point within the box (B) or the position of Al's indifference curve relative to the origin (C) are not direct indicators of Pareto efficiency.

-The Above Figure Depicts the Edgeworth Box for Two Individuals,Al