Trade Offs

Economic Definitions

1. Trade-Offs
Why we say:
“There Ain’t No Such Thing
as a Free lunch”

2. What is a “Trade-Off”?
A Trade-Off involves selecting between
given alternatives in a situation
There is ALWAYS a trade-off!
Every decisions that you make has
alternatives.

3. Why do we have Trade-Offs?
We have trade-offs due to scarcity.
We cannot have everything all of the time!
Trade off Occur at all levels of society

4. Trade-Offs for Individuals
Every decision that
someone makes reflects
a trade-off
Trade-Offs are constantly
occurring and
inescapable
Examples could include:
What to buy
What to wear
How much to sleep!

5. Trade Off’s for Businesses
Businesses are
constantly making
decisions
Examples could
include:
Who to Hire?
What to Produce?
What to Charge?

6. Trade Off’s for Government
Government makes
Trade Off’s when it
sets policy.
Examples could
include:
Tax Policy
Fiscal Policy
Foreign Relations