Upon graduation in 2010, Sam received two job offers as an economic consultant,

Question

Upon graduation in 2010, Sam received two job offers as an economic consultant, one in Toronto, Ontario, and the other in Halifax, Nova Scotia. Assume that both jobs were equally interesting to Sam and that he was indifferent between relocating to Toronto or staying in Halifax. Both positions offered a salary of $52,000.
For 2010, the Toronto CPI was116.5 and the Halifax CPI was 117.6 (base year 2002).

If Sam was only concerned about the purchasing power these salaries offered him, how much would he have to earn in Toronto to have the same purchasing power as in Halifax, with a salary of $52,000? If Sam was only concerned about the purchasing power these jobs offered him, which job should he have accepted? Explain briefly.

Explanation / Answer

would he have to earn in Toronto to have the same purchasing power as in Halifax, with a salary of $52,000 = 52000/117.6*116.5 = 51513 If Sam was only concerned about the purchasing power these jobs offered him, then he would have acepted this job for Toronto, as the amount of money he will need to sheell out for buying other things will be lower in Toroto than in Halifax Happy to help

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