Maryann and Don want to open their own deli.To do so, Maryann must give up her job, at which she earns $20, 000 per year, and Don must give up his part-time job, at which he earns $10, 000 per year.They must liquidate their money market fund, which earns $1, 000 interest annually.The rent on the building is $10, 000 per year, and expenses for such necessities as utilities, corned beef, and pickles are $35, 000 annually.What is the explicit cost per year of operating the deli?
A)$10, 000
B)$35, 000
C)$45, 000
D)$31, 000
E)$76, 000

Question

Quizplus · Accepted Answer

The explicit cost per year of operating the deli is the sum of all the expenses they incur by running the deli, which is $10,000 (rent) + $35,000 (expenses) = $45,000. They have already accounted for giving up their previous jobs and liquidating their money market fund, so those are not included in the explicit cost of operating the deli.

Maryann and Don Want to Open Their Own Deli