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
a. The person living in Minneapolis has
b. The person living in Minneapolis has
c. The person living in Anchorage has
d. The person living in Anchorage has
Minneapolis earning a salary of
a. The person living in Minneapolis has
b. The person living in Minneapolis has
c. The person living in Anchorage has
d. The person living in Anchorage has
Ask by Crawford Bartlett. in the United States
Mar 06,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The person in Anchorage has $50.80 more purchasing power per CPI unit than the person in Minneapolis.
Solution
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The Deep Dive
To compare the purchasing power of the two individuals, we first need to adjust their salaries based on their respective CPIs.
In Minneapolis, the purchasing power can be calculated as:
In Anchorage, the purchasing power can be calculated as:
Now, subtract the two values to find the difference in purchasing power:
Thus, the person living in Anchorage has more purchasing power than the person in Minneapolis.
The best answer choice that closely resembles this calculation is: c. The person living in Anchorage has
Just remember, these kinds of calculations help you understand the real value of salary when comparing different locations! Adjustments for the cost of living can be crucial if you’re thinking about a move or job offer!
Also, keep in mind that CPI reflects the cost of living and inflation, which can change over time. Always check for the latest data when making important financial decisions!
