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Daphne has received job offers in six different cities across the United States
Daphne has received job offers in six different cities across the United States. The table below shows the nominal wage she is being offered in each city and the average monthly rent for an apartment in each city. a. Calculate Daphne's real wage in terms of how many months of rent her wage could purchase in each city and complete the “Real Wage” column in the table below. Instructions: Enter your answers as a whole number. Real Wage (months of rent) Daphne's Nominal and Real Wages Nominal Salary City (dollars) Atlanta $50, 250 Austin 50,750 Chicago 65,250 Lincoln 45,250 Madison 48, 250 New York 95, 250 Monthly Rent (dollars) $1,400 1,545 2,075 1,075 1,355 3,250 b. In which city is the nominal wage highest? (Click to select) c. In which city is the real wage highest? (Click to select) v
Expert Solution
(a)
Real wage is calculated as follows -
Real Wage = Nominal Salary/Monthly Rent
For instance, In Atlanta City, Nominal Salary is $50,250 and Monthly Rent is $1,400.
Calculate Real Wage -
Real Wage = Nominal Salary/Monthly Rent = $50,250/$1,400 = 35.89 or 36 months
The real wage in Atlanta City is 36 months of rent.
Similarly, real wage will be calculated for other cities.
Following is the complete table -
| City | Nominal Salary | Monthly Rent | Real Wage (months of rent) |
| Atlanta | $50,250 | $1,400 | 36 |
| Austin | 50,750 | 1,545 | 33 |
| Chicago | 65,250 | 2,075 | 31 |
| Lincoln | 45,250 | 1,075 | 42 |
| Madison | 48,250 | 1,355 | 36 |
| New York | 95,250 | 3,250 | 29 |
(b)
As above table shows,
The nominal wage is highest in New York.
(c)
As the above table shows,
The real wage is highest in Lincoln.
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