Question

You are offered two jobs, one in Atlanta, paying $67,000, and one in Los Angeles, paying $65,000. The cost-of-living index is 95.6 in Atlanta and 136.4 in Los Angeles. If real wages are the only consideration, then you would a) definitely take the job in Los Angeles because the real wage is higher there. b) definitely take the job in Atlanta because the real wage is higher there. c) decline both jobs because the real wages are negative. d) be indifferent between the two jobs because the real wages would be exactly the same. e) definitely take the job in Los Angeles because the nominal wage is higher there.

          You are offered two jobs, one in Atlanta, paying $67,000, and one in Los Angeles,
paying $65,000. The cost-of-living index is 95.6 in Atlanta and 136.4 in Los Angeles.
If real wages are the only consideration, then you would
a) definitely take the job in Los Angeles because the real wage is higher there.
b) definitely take the job in Atlanta because the real wage is higher there.
c) decline both jobs because the real wages are negative.
d) be indifferent between the two jobs because the real wages would be exactly
the same.
e) definitely take the job in Los Angeles because the nominal wage is higher
there.

You are offered two jobs, one in Atlanta, paying 67,000, and one in Los Angeles,
paying65,000. The cost-of-living index is 95.6 in Atlanta and 136.4 in Los Angeles.
If real wages are the only consideration, then you would
a) definitely take the job in Los Angeles because the real wage is higher there.
b) definitely take the job in Atlanta because the real wage is higher there.
c) decline both jobs because the real wages are negative.
d) be indifferent between the two jobs because the real wages would be exactly
the same.
e) definitely take the job in Los Angeles because the nominal wage is higher
there.

Added by Cristian M.

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