Title: Trade-Offs in Economics: Definition & Examples - Business Class [2021 Video] | Study.com
Headings: Trade-Offs in Economics: Definition & Examples
Trade-Offs in Economics: Definition & Examples
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Definition of Trade-Offs in Economics
Trade-Off Examples
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Examples of Trade-Offs
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Trade-Offs in Economics: Definition & Examples
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Trade-Offs in Economics: Definition & Examples
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Content: You probably make decisions like this several times a day without even realizing it. Since your resources - such as time and money - are limited, you must choose how to best allocate them by making some trade-offs. Let's learn a little more about trade-offs and why understanding this concept will help you make better decisions about your time and money. Most of us don't have so much money that we are in a position to buy everything we desire. We must put thought into every purchase and how it affects our bank account. We also must think about what type of satisfaction that purchase will give us. As a result, to get one thing that we like, we usually have to give up another thing that we also may like. 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.