If a change occurs that causes a Pareto efficient outcome, is the change necessa

Question

If a change occurs that causes a Pareto efficient outcome, is the change necessarily a Pareto improvement?  Explain. If a change occurs that causes a Pareto efficient outcome, then the change

A. is not necessarily a Pareto improvement because such improvements are value judgments.

B. is not necessarily a Pareto improvement because someone could be worse off.

C. is a Pareto improvement because at least one person will be better off.

D. is a Pareto improvement because the cost-benefit principle is satisfied. .

Explanation / Answer

Ans is B

Pareto efficient is a point where nobody can be made better off without worsening someone. And pareto improvement is a point where atleast one is better off without worsening other.

A set of pareto efficient point in edgeworth is known as contract curve.

Thus a movement from one efficient point to another is the change but not a pareto improvement

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