Trade - Off: 

Life is a continuous sequence of decisions and very single decision involves choosing one thing over another or trading off something for something else. A tradeoff means giving up one good or activity in order to obtain some other good or activity. When choices are made (collectively or by an individual) to accept having less of one thing in order to get more of something else, the results are called trade-offs. 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.

Trade-offs is the direct result of the choice or decision made as a result of scarcity.

A society faces three key tradeoffs:

Which goods and services to produce

How to produce them

How much labor and inputs should a firm use to produce a car

Who gets the good and services (allocation)

A careful and systematic evaluation of trade-offs involves comparing the costs and benefits of each of the available alternatives with each other. Nearly all choices (and hence most trade-offs) are not "all-or-nothing decisions"; rather they normally involve marginal or small changes - meaning a little more of this at the cost of a little less of that. Consumers, by evaluating marginal costs and marginal benefits constantly make trade-offs while considering whether to buy one more unit or one unit less of a good or service in their efforts to get a combination of goods and services that give them the greatest satisfaction for their available buying power. Producers also constantly decide their trade-offs regarding whether to produce somewhat more or somewhat less of a particular good, whether to add a few more workers or lay off a few, whether to invest in more plant and equipment or whether to close down some of existing capacity, and so on, in their efforts to maximize profits.