Pareto efficiency

Pareto efficiency or optimal is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off. Pareto efficiency is when an economy has its resources and goods allocated to the maximum level of efficiency, and no change can be made without making someone worse off.

Let us suppose we have to allocate fruits to A and B.  Initially A and B are allocated 2 and 3 fruits respectively.
How about giving 2 fruits to A and 4 fruits to B? (2,4) is Pareto optimal than (2,3), as A gets the same, while B improves his position. So, B likes it, while A loses nothing.
But consider the outcome 3 fruits to A and 2 fruits to B. Now A improves his position but B loses one fruit. So, the outcome (3,2) is not Pareto optimal compared to (2,3).









Pareto set or front is a collection of all Pareto efficient allocations in a given system. A Pareto improvement is when a change in allocation makes at least one individual better off without making any other individual worse off.