Scenario 24-4
Quinn has job offers in Wrexington and across the country in Charlieville.The Wrexington job would pay a salary of $50,000 per year,and the Charlieville job would pay a salary of $40,000 per year.The CPI in Wrexington is 150,and the CPI in Charlieville is 90.
-Refer to Scenario 24-4.If Quinn only cares about maximizing her purchasing power,then she should
A)take the Charlieville job.
B)take the Wrexington job.
C)take either job because they both have the same purchasing power.
D)The answer cannot be determined from the information given because a salary is not the same as purchasing power.

Question

Quizplus · Accepted Answer

To maximize her purchasing power, Quinn should consider the difference in CPI between the two cities. The CPI in Charlieville is lower than Wrexington, which means that the cost of living in Charlieville is lower than in Wrexington. Therefore, even though the salary in Charlieville is lower than in Wrexington, Quinn's money would go further in Charlieville due to the lower cost of living. Therefore, Quinn should take the Charlieville job to maximize her purchasing power.

Scenario 24-4 Quinn Has Job Offers in Wrexington and Across the Country