Question

Cole got $100 for his birthday. He can either save the money or buy a tennis racket with it. What is the opportunity cost if he buys the racket ?

Answer 1

If Cole buys a racket he can be good a sport but if he saves then he can buy even more if he wants.

Answer 2

Answer:

The opportunity cost of buying the racket is to save the $100.

Explanation:

The opportunity cost represents what we put aside when we choose one option between two or more options. When you buy the racket, you could have earmarked the money for savings and thus be able to generate interest or buy other objects. The opportunity cost in this exercise is to have saved the money.