Question

Consternation Corporation has an agreement with its workers to index completely the wage of its employees using the CPI. Consternation Corporation currently pays its production line workers $7.50 an hour and is scheduled to index their wages today. If the CPI is currently 130 and was 125 a year ago, the firm should increase the hourly wages of its workers by

Answer 1

increase in wage is $0.30

Step-by-step explanation:

Given data:

worker pay $7.50/hr

consumer price index CPI - 130

increase in wages can be obtained by following relation

increase in wage
`= (CPI* hourly\ wages)/(CPI duration) - previous\  hourly\  wages`

Putting all value to get desired value

increase in wage
`= (130* 7.50)/(125) - 7.50`

increase in wage is $0.30