Chapter 1: Ten Principles of Economics- Principle 1: People Face Trade-Offs
"There is no such thing as a free lunch." This idea is explored in the first principle of economics, where one must give up something to get something. A trade-off found in the market is between efficiency and equity, where equity is finding a fair distribution of resources among the members of society, while efficiency is maximizing from the resources. Examples of trade-offs can be seen within real-life situations too, like in a high school student's everyday life, as well as in Google's experiment on team building.
Starting with a general example of trade-offs, a high school student makes decisions everyday that involve trade-offs. Consider a high school student who is invited to hang out with their friends for 3 hours, but has a test the next day for AP Microeconomics. The student is now conflicted as they can only choose between hanging out with friends, or studying for the test. The trade-off in this case is the enjoyment the student would achieve from time spent with their friends, and time spent studying, resulting in a higher test performance. Trade-offs, as shown, are a part of student's everyday lives, showing how the first principle of economics is something to think about when making decisions.
Now examining a more specific example, take a look at Google's study. Google attempted to build a "perfect team", and the person examined in their study, Julia Rozovsky, was shown to have faced trade-offs in her professional journey. Ms. Rozovsky determined the trade-offs between continuing to work at a consulting firm, researching as a professor at Harvard, and attending a business school. In making her decision, Julia Rozovsky decided working at a consulting firm was not the appropriate setting for her and she wanted more interaction than researching at Harvard. As a result, Ms. Rozovsky attended the Yale School of Management and immersed herself in a "case-competition" team, where majority of the cases revolved around the financial analyzes made. The extraordinary work conducted by this unofficial team led Google to form theories on what makes an ideal team, showing how Julia Rozovsky helped Google's research and furthered her career at the same time. This enforces the idea that giving up careers at Harvard and at a consulting firm to pursue furthered education was profitable, but it was at the expense of giving up her job. In conclusion, Ms. Rozovsky's choices highlight how trade-offs apply to real life.