Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla

1.adopted a negative technological change because it chose high-skilled workers over low-paid workers.
2.eroded some of its competitiveness in the luxury electric car market because of its increased cost of production.
3.faced no trade-offs because employing more technically-skilled workers increased efficiency.
4. faced a trade-off between higher cost and lower precision

Tesla open its plant at California where the labour cost is high but it also have the advantage of having the highest quality technical personnel in its plant at California since the people at California have a high level of technical training.

Thus Tesla had to chose between the two, that is the highly qualified technical people in its team or the high wage of the people. Tesla has no choice but to choose one from the two situation.

Such a situation faced by Tesla is known as "trade-off". It is a situation in which people have to choose one condition over the other. It may be defined as a situational decision between two desirable condition where loosing one aspect results in gaining the other situation.

Same situation is faced by Tesla when it opened its plant at California, where Tesla had to choose between higher cost and lower precision.

Thus the answer is 4. faced a trade-off between higher cost and lower precision.