Pareto optimality

Pareto optimality is when everyone is as happy as they can be, but nobody else can be made happier without someone else becoming less happy. Imagine you and your friend having a box of chocolate. You both get 5 chocolates but you like the dark chocolates and your friend likes the milk chocolates. If you were to switch chocolates, you would be happier but your friend would be sad. This would result in a poorer outcome than before. But, if you share some of your dark chocolates with your friend and your friend shares some of his milk chocolates with you, then both of you can be happy and nobody would be sad. That would be a Pareto optimal outcome!