A Pareto improvement occurs when a change in allocation benefits at least one individual without making anyone else worse off. This concept is named after the Italian economist Vilfredo Pareto, who introduced the idea of efficiency in resource distribution. In a Pareto improvement, the overall welfare of a group can increase while ensuring that no one is negatively impacted. In practical terms, consider a scenario where two friends share a pizza. If one friend gives up a slice they don't want, allowing the other friend to enjoy more, this situation represents a Pareto improvement. Both friends are either better off or remain equally satisfied, illustrating the essence of this economic principle.