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In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is the loss of the most preferred alternative given up. [2] A tradeoff, then, involves a sacrifice that must be made to obtain a certain product, service, or experience, rather than others that could be made or obtained using the same required resources.
Researchers in political economy have viewed the trade-off between military and consumer spending as a useful predictor of election success. [1] In this example, a nation has to choose between two options when spending its finite resources. It may buy either guns (invest in defense/military) or butter (invest in production of goods), or a ...
The Williamson tradeoff model is a theoretical model in the economics of industrial organization which emphasizes the tradeoff associated with horizontal mergers between gains resulting from lower costs of production and the losses associated with higher prices due to greater degree of monopoly power.
A good can be produced at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. [1] Comparative advantage describes the economic reality of the gains from trade for individuals, firms, or nations, which arise from differences in their factor endowments or technological progress. [2]
For example, an individual with severe asthma could be offered 10 years in their current condition, or a shorter length of time in full health. If this individual is willing to trade off two of the ten offered years in order to regain full health, this suggests that eight years in full health has the same value as ten years with severe asthma.
Trade credit is an arrangement that allows a business to acquire goods or services from another business without making immediate payment. Trade credit is essentially a short-term loan without ...
In mathematics and economics, a corner solution is a special solution to an agent's maximization problem in which the quantity of one of the arguments in the maximized function is zero. In non-technical terms, a corner solution is when the chooser is either unwilling or unable to make a trade-off between goods.
A trade war is a conflict between two countries marked by rising tariffs and other similar protectionist actions. Remember, a tariff is a tax put into place by one country on imported goods or ...