ar in all probability Hyman (1994).
In order to maintain the same standard of living in Boston that
you could enjoy on a salary of $30,000 in Columbia, South
Carolina you would need to earn $44,272 in Boston, Mass. Stated
another way, it is 47.6% more expensive to live in Boston,
Massachusetts than Columbia, South Carolina. For most people this would preclude the necessity of sophisticated microeconomic analysis. What follows is a presentation of the cost index for common expenditures in the two cities. (Sperlings)
It is assumed that the two jobs are identical in all respects; there are no differences even in the elements not discussed such as employer prestige. Because there is no tradeoff in the "baskets" of benefits between the jobs, they would represent a single point, and not a curve of tradeoffs. In the classic example of baskets of apples and bananas, both baskets have the same number of apples and bananas.
It is obvious that there are substantial economic advantages in living in Columbia SC as compared to Boston. The choice must therefore be made entirely on the relative attractiveness of living and working in Columbia versus Boston. It would be necessary to plot the number of identical baskets (that presumably contain a lot more than apples and oranges) that could be purchased at various salary levels in both cities. This is actually a supply curve. It would be clear that the supply curve for Columbia would be to the right of the curve for Boston. Therefore, the number of baskets that could be purchased in Columbia at a given salary level would be greater than the number that could be purchased in Boston. This would produce a higher level of consumer satisfaction in Columbia.
Question 3 International Trade Protection
In a microeconomic sense, the purpose of the tariff is to move the supply curve for the goods produced in the more efficient (lower cost/s
...