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Misalllocation of resources in economics is an inefficient use of resources that leads to inefficiencies in production, resulting in a lower standard of living. It occurs when resources are not used in the most efficient manner, potentially leading to economic inefficiency. This can happen when resources are misallocated among different sectors of the economy or when resources are not used to their full potential. Misallocation of resources can cause economies to miss out on potential growth, as resources are not being used to their fullest potential. It can also lead to a decrease in production, as resources are not being used in the most efficient manner. Misallocation of resources is an important issue that can have serious consequences for economies and should be addressed in order to maximize economic growth.