Trade-offs

Definition

Trade-offs refer to the choices individuals or societies make when they give up one thing to gain something else. It involves sacrificing one option for another due to limited resources.

Related terms

Marginal Analysis: Examining the additional benefits versus additional costs when making decisions.

Efficiency: Achieving maximum output from available resources without waste.

Comparative Advantage: When an individual or country has a lower opportunity cost in producing a particular good compared to others.