Final answer:
The opportunity cost of buying a tennis racket with Cole's $100 birthday money is the savings he forfeits as a result of this purchase. This exemplifies the economic concept of comparing the value of what must be given up to obtain something else.
Step-by-step explanation:
The opportunity cost if Cole buys the tennis racket is losing out on savings. This cost represents the next best alternative foregone, which in this case, is the potential interest or value he could have gained from saving the money.
Opportunity cost is a fundamental concept in economics that describes the value of the next best alternative that must be forgone as a result of making a decision. When Cole decides to use the $100 to purchase a tennis racket, he automatically foregoes the opportunity to save that money. This lost chance to save and possibly earn interest or invest the money represents the opportunity cost of his choice to purchase the racket. The concept encourages individuals to consider the trade-offs in every economic decision they make.
The opportunity cost if Cole buys the tennis racket is losing out on savings. Opportunity cost refers to the value of the next best alternative that is given up when a choice is made. In this case, Cole can either save the money he received for his birthday or buy a tennis racket. If he chooses to buy the racket, he forgoes the opportunity to save the money, leading to the loss of potential savings.