Maryann and Don want to open their own deli. To do so, Maryann must give up her job, where she earns $20,000 per year, and Don must give up his part-time job, where 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 the expenses of such necessities as utilities, corned beef, and pickles are $35,000 annually. _____ 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

Maryann and Don want to open their own deli. To do so, Maryann must give up her job, where she earns $20,000 per year, and Don must give up his part-time job, where 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 the expenses of such necessities as utilities, corned beef, and pickles are $35,000 annually. _____ 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​

Quizplus · Accepted Answer

The explicit cost per year of operating the deli can be calculated by adding up all the expenses: 
Rent on the building: $10,000 
Expenses for necessities: $35,000 
Salary given up by Maryann: $20,000 
Salary given up by Don: $10,000 
Interest given up from money market fund: $1,000 
Total Explicit Cost: $76,000 
Therefore, the explicit cost per year of operating the deli is $76,000.

Maryann and Don Want to Open Their Own Deli