ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A trade-off (or tradeoff) is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects. In simple terms, a tradeoff is where one thing increases, and another must decrease.

Detailed explanation-2: -A trade-off is a kind of compromise that involves giving up something in return for getting something else.

Detailed explanation-3: -All choices, whether they are made by individuals or by groups of individuals such as governments, have a cost associated with them; economists call this an Opportunity Cost. Opportunity cost is the value of the benefits of the foregone alternative, of the next best alternative that could have been chosen, but was not.

Detailed explanation-4: -The idea of trade-offs is one of the most basic principles in economics, that in order to have more of one thing, you have to accept having less of something else. This principle disciplines us to use resources efficiently and without waste, and also makes us alert to new resources that can satisfy our wants.

Detailed explanation-5: -What is the relationship between decisions and trade-offs? Decisions are directly related to trade offs because what one person chooses can have an effect on outcome. The decisions you make at work typically have obvious answers.