Trade-off
Topic: Scarcity, Choice and Economic Systems · NCERT: Class 9, Ch 8 "Building Blocks in Economics: The Problem of Choice"
Meaning
A trade-off means giving up some of one good or benefit to get more of another. It exists because resources are scarce and have alternative uses, so you cannot have more of everything. The value of what you give up is the opportunity cost. Trade-offs often set short-term gain against long-term sustainability.
Example
A farmer can grow sugarcane or paddy for high profits, or millets and pulses, which save water and improve soil health. Choosing sugarcane means trading off the water savings and soil benefits for higher income now. A government faces a similar trade-off between spending on defence and spending on health.
Don't confuse with
- Opportunity cost: a trade-off is the act of giving up one thing for another. Opportunity cost is the value of the next-best alternative given up in that trade-off.