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Radio buttons enable users to select one option from multiple choices, often referred to as a radio button group. In a tutorial, an issue management application is demonstrated within a service studio for a reactive web application. The tutorial begins with creating entities, including an "Issue" entity with attributes such as title, description, and important date/time. Additionally, a static entity for issue priority is introduced, allowing for dropdown values like High, Medium, and Low. The tutorial also covers establishing relationships between entities, specifically connecting the priority static entity to the issue entity to create a foreign key for priority within the issue entity.