If the cost of living is higher in richer cities than in poorer cities, and the nominal minimum wage were the same in every city, then the real purchasing power of the minimum wage would necessarily be
A)higher in the richer cities.
B)higher in the poorer cities.
C)lower in the poorer cities.
D)independent of the cost of living in any city.

Question

Quizplus · Accepted Answer

The real purchasing power of the minimum wage would be higher in poorer cities because the cost of living is lower there, allowing the same amount of money to buy more goods and services compared to richer cities where the cost of living is higher.

If the Cost of Living Is Higher in Richer Cities