What is a trade-off and opportunity cost?
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.
What is trade offs in economics?
The term “trade-off” is employed in economics to refer to the fact that budgeting inevitably involves sacrificing some of X to get more of Y. With a fixed amount of savings, one can buy a car or take an expensive vacation, but not both. The car can be “traded off” for the vacation or vice versa.
Are trade offs and opportunity costs the same?
For example, when we sacrifice one thing to obtain another, that’s called a trade-off. 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.
What is the definition of opportunity cost in economics?
“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up,” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.
What are trade offs examples?
The definition of trade off is an exchange where you give up one thing in order to get something else that you also desire. An example of a trade off is when you have to put up with a half hour commute in order to make more money. YourDictionary definition and usage example. “Trade-off.”.
What does trade off means?
Definition of trade-off. 1 : a balancing of factors all of which are not attainable at the same time the education versus experience trade-off which governs personnel practices— H. S. White.
What is trade off decision making?
In environmental conservation vocabulary a “trade-off decision” implies that you are making a decision that will necessarily mean a loss of some sort of benefit or positive aspect of something as a result of the decision you are making. For example, if you are a conservation NGO and your project chooses to use chemical fertilizers instead…
What is the definition of trade off?
Definition of trade-off. 1 : a balancing of factors all of which are not attainable at the same time the education versus experience trade-off which governs personnel practices — H. S. White.
