ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: Trade-offs arise because of the lack of resources and unlimited wants. Not only individuals but also societies face the problem of limited resources with unlimited wants. Hence, the problem of trade-off at society’s level exits.

Detailed explanation-2: -Societies face a tradeoff between more consumer goods (low taxes) and more public goods (defense, social programs). Since governments can borrow, there is a tradeoff between consumption for current and future generations. There is sometimes a tradeoff between the environment and jobs.

Detailed explanation-3: -The first principle states that people face trade-offs which simply means that to get a thing A, we will have to give up or sacrifice other things B, C, or D. We have to make a decision to choose one alternative out of the many alternatives available to us.

Detailed explanation-4: -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-5: -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.