A Labor Contract Provides for a First-Year Wage of $10

question 107

Multiple Choice

A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract and by another 3 percent in the third year. The CPI is 1.00 in the first year, 1.07 in the second year, and 1.15 in the third year. What dollar wage must be paid in the third year?

• A)$10.61
• B)$11.15
• C)$12.20
• D)$12.31

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Definitions:

Decreased

To become smaller or less in size, quantity, intensity, or degree.

Equivalent Phrase

A term or expression that has the same meaning as another, especially in a different mathematical context.

Difference

The outcome of deducting one figure from another.

Algebraic Expression

An expression built from constants, variables, and a finite number of algebraic operations (e.g., addition, subtraction, multiplication, division).