Trade-Offs are all the alternatives that we give up whenever we choose one course of action over another. Economists point out that all individuals, businesses, and large groups of people - even governments

Individuals and Trade-Offs:

Decisions you make will always involve a trade-off. For example, if you choose to spend more time at work, you give up watching a movie or going to a baseball game. Also another example, choosing to play soccer might prevent you from working on the yearbook or having a part-time job.

Businesses and Trade-Offs:

For business people, they make descisions on how to use land, labor, and capital resources which also creates trade-offs. Farmers who plant broccoli can't use the same land at the same time to grow cauliflower. A manufacturer who wants to use all their equipment to build chairs eliminates the possibility of building tables or desks at the same time.

Society and Trade-Offs:

Countries also make decisions that involve trade-offs. Economists simplify their explanations of the trade-offs countries face by using the example guns or butter. In short, a country that decides to produce more military goods ("guns") has fewer resources to devote to consumer goods ("butter") and vice versa. The steel used to make a tank is no longer available for building the dairy equipment needed to make butter.