1.The average individual in a country earns an annualsalary of $60,000, of which $24,000 is spent on housing,$10,800 on transportation, and $14,000 on other goods andservices. Suppose the government in this country mandatesthat all that all salaries and prices of all goods be reducedby 40 percent.A. How much does averageindividual now earnB. How much does the averageindividual now spent on thehousing, food, transportationand other goods and services?c. What happened to the averageindividual's real salary?

1) Reduction in salary = 40% x $60,000 = $24,000 After the 40% fall in the salary, an average…

A. How much does average individual now earn B. How much does the average individual now spent on the housing, food, transportation and other goods and services? c. What happened to the average individual's real salary?

A. How much does average individual now earn B. How much does the average individual now spent on the housing, food, transportation and other goods and services? c. What happened to the average individual's real salary?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1.The average individual in a country earns an annual
salary of $60,000, of which $24,000 is spent on housing,
$10,800 on transportation, and $14,000 on other goods and
services. Suppose the government in this country mandates
that all that all salaries and prices of all goods be reduced
by 40 percent.
A. How much does average
individual now earn
B. How much does the average
individual now spent on the
housing, food, transportation
and other goods and services?
c. What happened to the average
individual's real salary?

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