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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.
In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time.
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 ...
Opportunity cost is also often defined, more specifically, as the highest-value opportunity forgone. So let's say you could have become a brain surgeon, earning $250,000 per year, instead of a ...
Marginal cost: The increase in cost caused by an additional unit of production is called marginal cost. By definition, marginal cost (MC) is equal to the change in total cost ( TC) divided by the corresponding change in output ( Q): MC(Q) = TC(Q)/ Q or, taking the limit as Q goes to zero, MC(Q) = lim( Q→0) TC(Q)/ Q = dTC/dQ.
Cost Estimating is an approximation of the cost of all resources needed to complete activities. Cost budgeting aggregating the estimated costs of resources, work packages and activities to establish a cost baseline. Cost Control – factors that create cost fluctuation and variance can be influenced and controlled using various cost management ...
The term, Tradespace, is a combination of the words "trade-off" and "playspace", where "trade-off" indicates the method of traversing the Tradespace in search of the optimal boundary space (e.g., trading off a cost in one cost center (variant A) for a cost in another cost center (variant B)).
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.