ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Making decisions requires trading off one item against another. In economics, the term trade-off is often expressed as an opportunity cost, which is the most preferred possible alternative. A trade-off involves a sacrifice that must be made to get a certain product or experience.

Detailed explanation-2: -Every decision has trade-offs. First, every decision has trade-offs. Because scarcity exists, we have to decide what the best use of our limited time and resources is. With each choice there is something we must give up.

Detailed explanation-3: -Every decision involves trade-offs because every choice you want results in picking it over something else. You can’t always get what you want, like having two things. You must pick only one over the other.

Detailed explanation-4: -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.