ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Opportunity cost. Opportunity cost is the trade-off that one makes when deciding between two options.

Detailed explanation-2: -trade-offs In economics, a trade-off is defined as an “opportunity cost.” For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day’s wages as the cost for that opportunity.

Detailed explanation-3: -People face trade-offsEdit Examples include how students spend their time, how a family decides to spend its income, how the government spends revenue, and how regulations may protect the environment at a cost to firm owners. A special example of a trade-off is the trade-off between efficiency and equality.

Detailed explanation-4: -Trying to decide whether to take the Fourth of July off to spend with your family, or to go to work and make extra overtime? That’s a trade-off. Trade-offs create opportunity costs, one of the most important concepts in economics. Whenever you make a trade-off, the thing that you do not choose is your opportunity cost.

Detailed explanation-5: -An example of a trade-off in a real-world scenario is: A family lives on five acres in the country and the parent commutes an hour and a half to work in the city. Although the family loves their home and land in the country, they decide to move into the city, reducing the commute to half an hour.