PEOPLE FACE TRADE OFFS

• PEOPLE FACE TRADE OFFS :-

It is dilemma, confusion of what to buy , what not to buy, where to buy, where not to buy is all about we are facing trade off

how to resolve trade off ?

we need to do cost benefit analysis,

cost of something is what you give up to get it, sacrifice what we made is cost is called as opportunity cost (cost of next best alternative)

benefit-cost= net benefit

let, 

x=150, y= 180

in x we get 150 units and in y we are getting 180  units, by comparing both we are getting 30 units extra in y, the 150 units which we dumping is the opportunity cost 

example for cost benefit:- 

1. time allocation for students:- he could spend time on napping, bike riding, watching t.v, working at part time job to gain extra money or he can study to get top rank 
2. spending parent income for student:- he spend money for watching movies, going tours, buying mobiles or buy books to gain more knowledge
3. efficiency or equality for society:- efficiency means society is getting the most they can from it's scarce resource, equality means benefits of those resource are distributed among society members.