Both Amy and Tom are trained as nurses. Amy makes $35,000 a year working as a nurse in an
emergency room in a New York City hospital. Tom makes $20,000 working as a community health
nurse in New York City. Which of the following is true?
Even though income is an imperfect measure of well-being, Amy and Tom must be equally well off because
either is free to switch jobs.
From this information it cannot be determined who is better off because income is an imperfect measure of
well-being.
Tom must be better off than Amy if he is willing to take a job at $15,000 a year less than Amy.
Tom is clearly worse off than Amy, because he earns $15,000 a year less.
