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Showing posts with the label People Face Trade-offs

People Face Trade-offs

The first lesson about making decisions is summarized in the adage “ There is no such thing as a free lunch. To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading   off one goal against another. Consider a student who must decide how to allocate her most valuabic resource-her time. She can spend all of her time studying economics she can spend all of her time studying psychology or she can divide her time between the two fields. For every hour she studies one subject she gives up an hour she could have used studying the other. And for every hour she spends studying she gives up an hour that she could have spent napping bike riding watching TV or working at her part-time job for some extra spending money. Or consider parents deciding how to spend their family income. They can buy food clothing or a family vacation. Or they can save some of the family income for retirement   or the childr...