AP Micro & MacroCore Economic Concepts
Trade-off
A trade-off is the exchange of one thing for another, reflecting the reality that choosing more of one thing means having less of something else.
Trade-offs arise from scarcity - since resources are limited, we can't have everything we want. Individuals, businesses and societies must weigh alternatives and make trade-offs. For example, a student who chooses to study rather than go out with friends is making a trade-off, gaining better grades but giving up leisure time.
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