Question: 9.1What do you understand Pareto efficient allocation to be? 9.2. Explain what a contract curve is in terms of economic efficiency. 9.3. With reference to

9.1What do you understand Pareto efficient allocation to be?

9.2. Explain what a contract curve is in terms of economic efficiency.

9.3. With reference to the Edgeworth box theory, draw a typical contract curve between two

consumers, Karen and James, to illustrate all possible efficient allocations of food and

clothing for each.

Tip: In the diagram, you must show the points of tangency between each of their

indifference curves to derive the contract curve.

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