Question

The average individual in a country earns an annual salary of $60,000, of which $24,000 is spent on housing, $10,800 on food, $10,800 on transportation, and $14,400 on other goods and services. Suppose the government in this country mandates that all salaries and the prices of all goods and services be reduced by 40 percent. a. How much does the average individual now earn

Answer 1

Answer:

The answer is $36,000.

Explanation:

If the average individual earns an annual salary of $60,000 and the government reduces all salaries and prices by 40%, then the salary of the average individual annualy decreases by $24,000 and comes down to $36,000 per year. But since the costs of services and prices of goods recude by 40% as well, it doesn't change the real salary.

I hope this answer helps.

Answer 2

The average individual now earn is $36,000.

• The calculation is as follows:

= Annual salary × (1 - reduced percentage)

= $60,000 × (1 - 0.40)

= $60,000 × 0.60

= $36,000

Therefore we can conclude that The average individual now earn is $36,000.

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