Los Angeles and New York. The Bureau of Labor Statistics publishes separate consumer price indexes for major metropolitan areas in addition to the national CPI. The CPI (1982–84 = 100) in December 2007 was 219.4 in Los Angeles and 229.4 in New York.

(a) These numbers tell us that prices rose faster in New York than in Los Angeles between the base period and the end of 2007. Explain how we know this.

(b) These numbers do not tell us that prices in December 2007 were higher in New York than in Los Angeles. Explain why.