Question

Minneapolis, MN has a CPI of 173. Anchorage, AK has a CPI of 226. How does the purchasing power of someone in Minneapolis earning a salary of $42,500 compare to the purchasing power of someone in Anchorage earning a salary of $67,000? a. The person living in Minneapolis has $57.61/CPI more than the person in Anchorage. b. The person living in Minneapolis has $130.45/CPI more than the person in Anchorage. c. The person living in Anchorage has $50.80/CPI more than the person in Minneapolis. d. The person living in Anchorage has $90.82/CPI more than the person in Minneapolis. Please select the best answer from the choices provided A B C D

Answer 1

Answer:

The answer is: C) The person living in Anchorage has $50.80/CPI more than the person in Minneapolis.

Explanation:

The Consumer Price Index (CPI) weighs the average prices of a basket of consumer goods and services. So the higher the CPI, the more expensive it is to purchase goods or services in that place.

The purchasing power of someone living in Minneapolis and earning $42,500 is $245.66/CPI; for someone living in Anchorage and earning $67,000 is $296.46/CPI. The difference between them is $296.46/CPI minus $245.66/CPI equals $50.80/CPI.

The person living in Anchorage has $50.80/CPI more than the person in Minneapolis.