Which of the following statement(s) are true with respect to the concept of ‘EFFICIENCY’ as used in mainstream economics? 1. Efficiency occurs when no possible organization of production can make anyone better off without making someone else worse off. 2. An economy is clearly inefficient if it is inside the Production Possibility Frontier (PPF). 3. At a minimum, an efficient economy is on its Production Possibility Frontier (PPF). 4. The terms such as ‘Pareto Efficiency’, ‘Pareto Optimality’ and ‘Allocative Efficiency’ are all essentially one and the same which denote ‘efficiency in resource allocation’. Select the correct answer using the code given below:

Which of the following statement(s) are true with respect to the concept of ‘EFFICIENCY’ as used in mainstream economics? 1. Efficiency occurs when no possible organization of production can make anyone better off without making someone else worse off. 2. An economy is clearly inefficient if it is inside the Production Possibility Frontier (PPF). 3. At a minimum, an efficient economy is on its Production Possibility Frontier (PPF). 4. The terms such as ‘Pareto Efficiency’, ‘Pareto Optimality’ and ‘Allocative Efficiency’ are all essentially one and the same which denote ‘efficiency in resource allocation’. Select the correct answer using the code given below: Correct Answer 1, 2, 3 and 4

• Pareto efficiency or Pareto Optimality’ is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off.
• Production Possibility Frontier shows the maximum possible output one can achieve when good and services are efficiently employed.
• The Pareto Efficiency states that any point within the PPF curve is considered inefficient because the total output of commodities is below the output capacity.
• Allocational efficiency is a characteristic of an efficient market in which capital is allocated in a way that is most beneficial to the parties involved.