5 Questions
Which economist is Pareto efficiency named after?
Vilfredo Pareto
What is a Pareto improvement?
A situation where some agents will gain and no agents will lose
What is a Pareto-dominated situation?
A situation where there exists a possible Pareto improvement
What is the Pareto front?
The set of all Pareto-efficient situations
What is Pareto optimality?
A situation where no action or allocation is available that makes one individual better off without making another worse off
Study Notes
Pareto Efficiency and Related Concepts
- Pareto efficiency is named after Vilfredo Pareto, an Italian economist.
Pareto Improvement
- A Pareto improvement is a change that makes at least one individual better off without making anyone else worse off.
Pareto-Dominated Situation
- A Pareto-dominated situation occurs when there exists a feasible alternative that is preferred by all individuals.
Pareto Front
- The Pareto front is a set of optimal solutions that represent the best possible trade-offs between different objectives.
Pareto Optimality
- Pareto optimality is a state in which resources are allocated in an optimal way, meaning that it is impossible to make one individual better off without making someone else worse off.
Test your knowledge of Pareto efficiency, Pareto optimality, and their relationship to economic efficiency and income distribution in this quiz. Learn about Vilfredo Pareto and the key concepts associated with his studies.
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