Which of the following statement(s) are true with respect to the concept of ‘EFFICIENCY’ as used in mainstream economics?

MCQ. 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 reorganisation 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’

(a) 1 and 4

(b) 1 and 3

(c) 2 and 3

(d) 1, 2, 3 and 4

Answer: (c) 2 and 3