?What is a Trade-off
A trade-off is a kind of compromise that involves giving up something in return for getting something else. When looking you for an after-school job, you might have to make a trade-off: a lower hourly wage for a more convenient location, for ,example .There are all kinds of trade-offs: one trade-off might be buying a new laptop that’s very lightweight and portable but doesn’t have as much memory as you wish it had. In economics, a trade-off is defined as an “opportunity cost.” For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day’s wages as the cost for that opportunity.
? What is Opportunity Cost
Opportunity cost is an economic concept which used to discuss choice. It always talks about the highest value of the next opportunity which is given up by the economy to gain the highest value which has been selected. That selection can be between two or more choices. For example “X” is waiting to enroll in the university and at the same time he gets a job opportunity at a company close to his house with a salary $ 50,000 per annum. But, X selects a university far away from his home, and he has to spend $ 40,000 per annum for his studies. By choosing this option, he will lose the earning of $ 50,000. That is the opportunity cost of study. Basically, it is the thing you miss when you are reaching for another option.
Opportunity cost can be calculated using different types of measurement tools such as consumer choice, competitive advantage, time management, cost of capital, career choice, and production possibilities.