Trade-offs, or compromises, occur when individuals or groups must choose between two or more options, each with its own benefits and drawbacks. Making a decision often means giving up something in order to gain something else. For example, when deciding how to spend time, a person might choose to study for an exam instead of going out with friends, sacrificing social time for academic success. In economics, trade-offs are essential in resource allocation. When a government decides to invest in infrastructure rather than education, it must consider the potential benefits and costs of each choice. Understanding trade-offs helps in making informed decisions that balance competing needs and priorities.