Are Type-1 Hypervisors better in performance than Type-2 Hypervisors and Why?

Yes the Type-1 Hypervisors are better in performance as compared to Type-2 hypervisors because Type-1 hypervisors does not run through a host OS, they utilize all resources directly from Host hardware. In cloud implementation Type-1 hypervisors are used rather than Type-2 because Cloud servers need to run multiple OS images and it should be noted that if OS images are run on host a OS as in case of Type-2, the resources will get wasted.