Question

Give three examples of important tradeoffs that you face in your life.

Short answer

The three examples of significant trade-offs that you may have had to make in your life are:

• Income vs.Leisure
• Job vs. Family
• Savings vs. Expenses

Step-by-step solution

Meaning of a trade-off

Trade-off refers to a situation in which an entity has to decide between two or more incompatible but desirable options. More of one means less of the other. The entity has to decide on the balance between the options. This can be explained using the example in Step 2.

Three examples of significant trade-offs:

• Income vs. leisure: Suppose an individual wants higher income. The person needs to work more, which means less time for leisure activities like reading or exercising.

• Job vs. family: Suppose the work commitments require an individual to work overtime. This leaves less time for family interactions. More work means less family time.

• Savings vs. Expenses: Suppose an individual wants to save money for the future. This means they will have to control their present expenses. Thus, greater savings means fewer expenses.