What does contract curve mean?

Definitions for contract curve
con·trac·t curve

This dictionary definitions page includes all the possible meanings, example usage and translations of the word contract curve.


  1. Contract curve

    In microeconomics, the contract curve is the set of points representing final allocations of two goods between two people that could occur as a result of mutually beneficial trading between those people given their initial allocations of the goods. All the points on this locus are Pareto efficient allocations, meaning that from any one of these points there is no reallocation that could make one of the people more satisfied with his or her allocation without making the other person less satisfied. The contract curve is the subset of the Pareto efficient points that could be reached by trading from the people's initial holdings of the two goods. It is drawn in the Edgeworth box diagram shown here, in which each person's allocation is measured vertically for one good and horizontally for the other good from that person's origin (point of zero allocation of both goods); one person's origin is the lower left corner of the Edgeworth box, and the other person's origin is the upper right corner of the box. The people's initial endowments (starting allocations of the two goods) are represented by a point in the diagram; the two people will trade goods with each other until no further mutually beneficial trades are possible. The set of points that it is conceptually possible for them to stop at are the points on the contract curve. However, some authors identify the contract curve as the entire Pareto efficient locus from one origin to the other. Any Walrasian equilibrium lies on the contract curve. As with all points that are Pareto efficient, each point on the contract curve is a point of tangency between an indifference curve of one person and an indifference curve of the other person. Thus, on the contract curve the marginal rate of substitution is the same for both people.

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How to say contract curve in sign language?


  1. Chaldean Numerology

    The numerical value of contract curve in Chaldean Numerology is: 6

  2. Pythagorean Numerology

    The numerical value of contract curve in Pythagorean Numerology is: 1


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"contract curve." Definitions.net. STANDS4 LLC, 2023. Web. 24 Sep. 2023. <https://www.definitions.net/definition/contract+curve>.

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    lacking orderly continuity
    • A. victimised
    • B. sought
    • C. disjointed
    • D. occasional

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