Step 1: Understanding the given information.
- The drop in the water table is \( 40 \, \text{m} \).
- The area of extraction is \( 1 \, \text{km}^2 = 10^6 \, \text{m}^2 \).
- The porosity of the aquifer is \( 35% = 0.35 \).
- The specific retention is \( 15% = 0.15 \).
Step 2: Calculate the volume of water extracted.
The volume of water that is extracted is given by:
\[
\text{Volume} = \text{Area} \times \text{Drop in water table} \times (\text{Porosity} + \text{Specific Retention})
\]
Substitute the given values:
\[
\text{Volume} = 10^6 \, \text{m}^2 \times 40 \, \text{m} \times (0.35 + 0.15)
\]
\[
\text{Volume} = 10^6 \times 40 \times 0.50 = 20 \times 10^6 \, \text{m}^3
\]
Step 3: Final answer.
The volume of water pumped out is:
\[
\boxed{20} \times 10^6 \, \text{m}^3
\]