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Radio buttons enable users to select one value from a set, forming a group known as a radio button group. In a tutorial within a reactive web application, the speaker demonstrates creating entities for issue management. The primary entity, "issue," includes attributes such as title, description, and important date/time. A secondary entity, a static entity, represents the issue's priority with values like high, medium, and low, which are suitable for drop-down and radio button selections. The tutorial proceeds to establish a relationship between the issue and priority entities by connecting them, thereby creating a foreign key in the issue entity to reference its priority.