whats the best engine for both performance and mileage??

I'll post my setup here even though it's a 273, since most of the parts are interchangeable with your 318.

Eddy 1406
Eddy Performer intake (Dual Plane) with the square bore to spread bore adapter spacer
Stock pistons and bore size
Stock Heads Ported to flow [email protected] int [email protected] exhaust decked .040
Solid Lifter Cam .473/.473 262 duration.
MP Electronic Ignition
Stock Exh Manifolds- 2.5" exhaust to Flowmaster (Drone Master) 40's
7 1/4 rear with (I believe to be) 3.20ish gears
A904 trans

This is my daily driver but I am not sure exactly what the mpg is. I drive it granny style to drop my kid at school and then John Force style on the way home. It's a lot of fun.

The car seat keeps the women away: