3) Give a brief definition of Pareto Efficiency, and describe how a perfectly competitive market structure will generate: a) Pareto Efficiency in Consumption/Exchange (Equal MRS across consumers) b) Pareto Efficiency in Production (Equal MRTS across firms) c) Pareto Efficiency in Output Mix (MRS = MRT across all goods) You need to explain how an individual consumer/producer would optimize in these circumstances, and why that individual behavior generates Pareto efficiency. For example, for b) you should discuss how MRTS is involved in a firm's profit maximizing decision.