Question

Describe the trade-off conditions that occur in the following conditions:
a. A family decides to buy a new house.
b. The cabinet of government of country A decided to provide energy subsidies to the public.
c. The CEO of the company XYZ decided to invest by opening a new factory.
d. A recently graduated scholar decides to continue his education to a higher level.

Answer 1

Trade off conditions occurs when we are in a dillema of selection. In other words "when we are in a state of giveing up one out of the two options, for example - buying a new house over a new car. Or buying a new bike over a new phone etc,  we are referred in a trade-off condition.

In Economics, it is a similar term to MARGINAL COST OR OPPORTUNITY COST, where we have to suffer the cost of one commodity over the selection of another.

So, now in context to the given situations

1. Trade-off conditions for a family decided to buy a new house.

- In today's modern word it is really hard to make both ends meet. So for buying a new house one must have to cut off all his extraveggencts for a long time. It may differ from family to family on the basis of their income.

- They must have to give up weekend tours.

- They must have to give up shoppings and all other expenses to save money for the house.  

So like wise this the family will have to stop its extra expenditure to buy a new house. Which drives it into a trade-off condition.

2. Trade-off conditions for a government decided to provide energy subsidies to the public.

- The government of any nation has the responsibility to provide better services to the pubic. So if the Cabinet decides to provide energy subsidies, it will have to go through the selection of another Service to be provided. Government may have to reduce other subsidies being provided to the public to get some money for energy subsidy.

3. A CEO opening a new factory.

- To open a new firm it takes land, labour, capital and more. So a CEO will have to manage all these things at a time. For the sake of money, he'll have to reduce company expenditures, which may be done by eliminating extra labour force. Here he may have to face a low productivity, but it will make him to manage capital.

4. Graduated scholar decides to continue his study to a higher level.

- Today as we all know conditions of unemployment, so it is everyone's first priority to get a job. If a graduate wants to continue with his study, he'll have to give up the opportunity of a job. And if he decides to get the job, then he can't go with his higher study. So here he'll face the trade-off condition for choosing his study or job.

So this how, every single field has its own trade-off conditions in respect to that field. We all have to make a selection for our needs. Because human demands are far more then the resources available.