Questions-Answers about trading

What are trade offs in business

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What are some examples of trade offs?

In economics, a trade-off is defined as an “opportunity cost.” For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day’s wages as the cost for that opportunity.

What are benefit trade offs?

Risk-benefit trade-off refers to the balance of negative and positive effects on achieving a goal, such as health. For medical decisions, a risk-benefit trade-off usually refers to the perception of the anticipated balance of improvements and deteriorations in health from a given choice.

Why are trade offs unavoidable?

Reduce prices and create jobs. This is the ideal economic outcome expected from all businesses today, not only in the long run, but also in the short term. Generally, lower prices allow more consumers to consume goods or services.

What is the difference between trade offs and opportunity costs?

Each choice made means another alternative has been forgone. A trade-off is isolating what that forgone alternative is, and opportunity cost involves calculating the cost of the trade-off. Trade-off and opportunity cost are therefore linked, with the former helping to calculate the latter.23 мая 2019 г.

What is a trade off give at least one example?

A trade-off is an exchange in which one benefit is given up in order to obtain another. Example: a material may be used to build a house because it is attractive to customers even though it is not as durable.

What are three examples of important trade offs that you face in your life?

Give three examples of important trade-offs that you face in your…

  • Trade-off between studying one subject over studying another subject.
  • Spending 15 dollars to buy a pizza or to buy a study guide.
  • Buying a car leads to a trade-off between the cost of the car and the cost of other things one might want to buy.
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What are cost trade offs?

Situation where the relationship between costs causes other cost(s) to rise when one cost is lowered.

What is another word for trade off?

balance, set-off, disadvantage, contradiction, arbitrage, equilibrium, Equilibria, arbitrate, refereeing, ‘arbitrage, quandary, accommodation, trade, counterparty, agreement, setoff, trading, give-and-take, equalisation, conundrum, counterbalance, bargain, drawback, swap, adjudicative.

Why is there a trade off for every decision?

Every decision involves trade-offs because every choice you want results in picking it over something else. … Opportunity cost means choosing the better one of two ideas. There will always be an alternative; what could have happened instead. Describe how people make decisions by thinking at the margin.

What are the major trade offs in capacity planning?

The major trade-off in capacity planning is having too much capacity vs. not having sufficient capacity. Having too much capacity will result in idle time and wasted resources. On the other hand, not having enough capacity will result in backorders or lost sales.

What trade offs are involved in buying a vehicle?

What are the trade-offs when buying a vehicle? 1. Usually the smaller the engine, the less gas a vehicle burns.

  • Purchase price divided by annual income = 2.0 or less.
  • Mortgage payment divided by monthly take-home = 33.3% or less.
  • Loan amount divided by appraised value of the house = 95% or less (often 80%)

What is cost trade offs in logistics?

Trade-offs are compensatory exchanges between the increase of some logistics costs and the reduction of other logistics costs and/or an increase in the level of customer service.

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What is opportunity cost give example?

Examples of Opportunity Cost. Someone gives up going to see a movie to study for a test in order to get a good grade. The opportunity cost is the cost of the movie and the enjoyment of seeing it. … The opportunity cost of taking a vacation instead of spending the money on a new car is not getting a new car.

Why is opportunity cost important in business?

Weighing opportunity costs allows the business to make the best possible decision. If, for instance, the company determines an alternative choice’s opportunity cost is greater than what the company gains from its initial decision, the company can change its mind and pursue the alternative choice.

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