People face Trade-offs:-
Ill be discussing about the very first principle of economics, i.e. people face Trade-Offs.
"There is no such things as a free lunch". We have to give up something in order to get something. To make decisions we go thorough many types of phase for example.
What to buy? What not to buy? Will this be ok , or will that be ok.?
This types of questions comes in every people's mind in a shopping mall.
Another example includes how students spend their time, how to utilize time,how a family decides to spend its income ,how they will save for a particular month, how the government spends revenue, how they will fix the anual budget and how regulations may protect the environment at a cost to firm owners. In each and every aspect of life people have to make this decisions.
Another trade-Off society faces in between efficiency and
Equality.
Equality means the benefits are distributed equally and uniformly among society's members.
Efficiency means the society is getting maximum benefits from there own resources.
In other words we can say efficiency refers to the size of the economic cake and equality refers to how the cake will be divided equally.
Recognising that people face Trade-offs does not by itself tell us what decisions they will or should make.
So our study of economics, therefore ,starts by acknowledging life's trade-offs.
-Ankit Talukdar
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