Making decisions requires trading off one goal against another. Classic trade-offs include guns and butter, efficiency and equity, work and leisure, spending and saving etc.

Because people face trade-offs, making decisions requires comparing the costs and benefits of alternative courses of action.

When there are no painful trade-offs to consider, then there are idle, wasted resources, those that yield no value in return for what they cost. However, trade-offs are often moving targets, shifting and changing with great speed.


Trade-offs can occur on every dimension, as explained here in 'Executive Economics', by Shlomo Maital:

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