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| Matthew Reeves is listening to a discussion on how resources move to the most efficient allocation. Two of the participants make these statements:Statement 1: When resources are diverted from beer production to wine production, this represents an inefficient allocation from the perspective of the beer producers.Statement 2: Market allocation of resources tends toward efficiency because the value of what a resource can produce determines its allocation in production.With respect to these statements: A:both are correct. B:only statement 2 is correct. C:only statement 1 is correct. |
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