John just graduated law school and has two competing job offers.The first is in Phoenix and pays a salary of $150,000.He has a similar job offer in Cleveland that pays $90,000.Which pair of CPIs would make the two salaries have the same purchasing power?
A)70 in Phoenix and 42 in Cleveland
B)68 in Phoenix and 34 in Cleveland
C)42 in Phoenix and 70 in Cleveland
D)34 in Phoenix and 68 in Cleveland

Question

Quizplus · Accepted Answer

To have the same purchasing power, the ratio of the salaries should equal the ratio of the CPIs. $150,000/$90,000 = 70/42.

John Just Graduated Law School and Has Two Competing Job