Question

Atlanta, GA has a CPI of 168. Seattle, WA has a CPI of 204. How does the purchasing power of an Atlanta resident earning a $32,800 salary compare to the purchasing power of a Seattle resident earning a $46,400 salary?
a.
The Atlanta resident has $34.46/CPI more than the Seattle resident.
b.
The Atlanta resident has $83.20/CPI more than the Seattle resident.
c.
The Seattle resident has $48.74/CPI more than the Atlanta resident.
d.
The Seattle resident has $32.21/CPI more than the Atlanta resident.

Answer 1

Compare salary per CPI point: Atlanta = 32,800 / 168 = $195.2381 per CPI point. Seattle = 46,400 / 204 = $227.4510 per CPI point. Difference = 227.4510 − 195.2381 = $32.21/CPI, so (d).