Which area pays the highest real wage?
A) Nominal Wage $15; Consumer Price Index for Area 50
B) Nominal Wage $20; Consumer Price Index for Area 100
C) Nominal Wage $25; Consumer Price Index for Area 150
D) Nominal Wage $50; Consumer Price Index for Area 200

Question

Quizplus · Accepted Answer

Real wage is calculated by dividing the nominal wage by the consumer price index (CPI) and then multiplying by 100. For each option: A) $15 / 50 * 100 = $30, B) $20 / 100 * 100 = $20, C) $25 / 150 * 100 = $16.67, D) $50 / 200 * 100 = $25. Option A has the highest real wage.

Which Area Pays the Highest Real Wage