Unit 4 DB: Cost of Living Comparison SPECIAL NOTE: Class, I am constantly asking
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Question
Unit 4 DB: Cost of Living Comparison
SPECIAL NOTE: Class, I am constantly asking students to offer position papers. However, this discussion board does not lend itself to that format. Make the comparison using as much of the economics concepts and terminology as you can - express yourselves as economists.
The cost of living varies between different areas of the country. If you earned $100,000 per year where you live now, and wanted to move. Select a city and state you’d like to move to.
To calculate this answer, log on to: http://www.bestplaces.net/COL/
How much would you need in additional income for your cost of living to remain unchanged? Or, perhaps your cost of living will decrease! By how much? What might explain the different costs, and how might they influence your decision to move there?
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Explanation / Answer
Let Suppose my current city is Pennsylvania, Illinois and want to move to Chicago, Illinois. In Pennsylvania the earning is $100,000. If I want to move to Chicago with this cost of living remain unchanged then I need additional $30,317 to same level maintain. This difference in cost arises because of cost living in two different place. If we take $100 as cost living national average. In Pennsylvania this cost of living index is $85 and in Chicago it is $111. So there is a difference in overall cost of living index is 26. We can say as in Chicago there require $30,317 more so Chicago is 30% costlier than Pennsylvania. This cost is high because of mainly in Chicago median home cost is 65% costlier than Pennsylvania. Not only this there is also difference in cost of living index in food, In Pennsylvania it is 103 and in Chicago it is 111. Cost of living index in housing in Pennsylvania is just 44 and in Chicago it is 112. There is some others index which are higher in Chicago like transportation, utilities etc.
These things will influence in my decision to move. Because these food, housing, transportstion, utilities are the basic necessities in day to day life. If these things are becoming higher so it will influence in my decision to move.
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