Trade Offs

Trade-offs

 

When an individual or a group makes a choice to accept having less of one thing in order to get more of something else, the result is called a "trade-off". For example, when one is allocating limited funds, the trade-off usually involves reduced spending for some purposes in order to be able to spend more for other more urgent purposes.  If you purchased a 2014 Mercedes Coupe you would probably have to make significant sacrifices in your other living expenses. 

Nations also have to make decisions about how and when to use their limited resources.  One of the most important decisions governments make is whether to allocate more resources to the military (weapons systems, army personel, fighter jets, etc.) or to non-military goods and services (consumer goods, public parks, medical care, etc.).  This trade off is known as the "guns or butter issue", because if more resources are spent strengthening the military, less will be available for non-military use. 

 

Complete this Activity: Draw a captioned cartoon to illustrate an economic trade-off that YOU have recently had to make in your own life.  (Feel free to label or caption your illustration as needed.)