When two people are on the contract curve,the allocation of goods

Question

Quizplus · Accepted Answer

When two people are on the contract curve, they have already reached an agreement that maximizes their respective utility, given their preferences and the available resources. Therefore, any change in the allocation of goods would make at least one of them worse off, violating Pareto efficiency. Thus, the allocation is both Pareto efficient (B) and such that neither individual can be made better off without making the other worse off (C), making D the correct answer.

When Two People Are on the Contract Curve,the Allocation of Goods