The median household income in Prince Edward Island is approximately $44,180 per year, while the median household income in Alberta is about $78,213.However, suppose the growth rate of per capita real GDP in Prince Edward Island is higher than in Alberta (3% versus 2%).

a. From the perspective of trying to maximize your income per capita, which state will have higher increases in income overthe next few years?

• Prince Edward Island, because the growth rate is higher.
• Alberta, because incomes are rising slower.
• Alberta, because income is already higher.
• Prince Edward Island, because the lower income means the cost of living is less.

b. From the perspective of trying to maximize your income per capita, which state will have higher increases in income inthe long run?

• Prince Edward Island, because the growth rate is higher.
• Alberta, because incomes are rising slower.
• Alberta, because income is already higher.
• Prince Edward Island, because the lower income means the cost of living is less.