Sharp knife cuts better than a blunt knife due to its very thin edge. The force of our hands falls over a very small sharp area of the object which producing a large pressure. And this large pressure cuts the object easily.
On the same side, the blunt knife does not cut an object easily due to its thicker edge, the force of our hand falls over a larger area of the object which produces comparatively less pressure.

Image showing cutting of a tomato with a sharp knife

Some of the learners also asked:
How can we say that pressure increases as area decreases?