Eficiencia en el intercambio: curva de contrato de consumo

Many possible efficient allocations can be reached in an Edgeworth box. To find all possible efficient allocations of goods between two consumers, one looks for all points of tangency between their indifference curves. 

These points form the Consumption Contract Curve, representing all Pareto-efficient allocations of two goods within the Edgeworth box. 

At these points, the marginal rates of substitution between the two goods are equal for both consumers. This ensures exchange efficiency.

However, while every point on the curve guarantees efficiency, the distribution of utility between the consumers varies. For example, points near the lower left of the contract curve imply low utility for Taylor and high utility for Alex. Conversely, points near the upper right corner represent high utility for Tayor and low utility for Alex. 

Once a point on the contract curve, such as E, is chosen, moving to another point, like F, makes at least one person worse off.

This follows from the definition of Pareto efficiency: if E and F are both Pareto-efficient allocations, improving one person’s situation at F must come at the expense of the other.