Question

How would living standards differentriate Sarah's living standard while living with Rosie compared to that expected when she will be living with Michelle Sarah and Rosies income is £14,500 x 2 + 1789 = 30,789 Sarah and Michelle income is 12 x 2140 = 25680 + 14,500 = 40,180 how would the two wages differentiate with living standards?

Answer 1

Ans.

Standard of living depends on the earnings of the people of the country. This differs from country to country. Per capita real GDP (real GDP divided by the size of the population) has often been used as a measure of the average standard of living in a country. Because it measures the standard of living and purchasing power of the average person in an economy.
In the given example the income is given as follows :
Sarah and Rosie living together have total income of = £14,500 x 2 + 1789 = 30,789
Sarah and Michelle living together have total income of =((12 x 2140 = 25680) + 14,500) = 40,180

This shows that Sarah is earning appx 14500 pound , and when she is living with Rosie both of them are earning appx same income and their combined income is 30789 pound
However when Sarah is living with Michell their total income is 40180 because Michelle is earning more then Rosie appx 25680. So their total income is more.
Our standard of living improves if we earn more and are able to spend more on goods and services given our income.
So Sarah’s standard of living will be better of when she lives with Michelle then Rosie.