A construction crew (that is currently unemployed and receiving $10/hr. in benefits) to fix a road.  The cement is purchased from a rip-off monopolist that charges $10/bag more than anyone else.  The Follow-up maintenance will be done after 1 year, using a different crew that we will assume is not unemployed. We will also assume the interest rate is 7%. The cost estimate provided by the contractor’s accountant is given in the table below: ITEM Quantity Wage Price Total Labor 1,000 hours $20/hour   $20,000 Cement 500   $50 $25,000 Follow up maint. 500 $20/hr   $10,000 Project Total       $55,000   The opportunity cost of the project is   Group of answer choices $55,000 $41,000 $39,000 $33,000

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
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A construction crew (that is currently unemployed and receiving $10/hr. in benefits) to fix a road.  The cement is purchased from a rip-off monopolist that charges $10/bag more than anyone else.  The Follow-up maintenance will be done after 1 year, using a different crew that we will assume is not unemployed. We will also assume the interest rate is 7%. The cost estimate provided by the contractor’s accountant is given in the table below:

ITEM

Quantity

Wage

Price

Total

Labor

1,000 hours

$20/hour

 

$20,000

Cement

500

 

$50

$25,000

Follow up maint.

500

$20/hr

 

$10,000

Project Total

 

 

 

$55,000

 

The opportunity cost of the project is

 

Group of answer choices

$55,000

$41,000

$39,000

$33,000

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