Inflation and Purchasing Power: A Five-Item Price Basket

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Social Studies · Economics
SP-ECON-004 · Free to print and use in your classroom · substituteplans.com
Page 2
Inflation and Purchasing Power: A Five-Item
Price Basket
Social Studies · Economics · Grades 10-12 · 50 minutes
Time needed
50 minutes (one class period)
Prep
Copy the 2-page worksheet (one per student). Write the percent change formula on the board.
Technology
None.
Student
independence
High. Students calculate individually.
Copies to make
One 2-page worksheet per student
Materials
Pencils, Worksheet, Calculator (recommended), Whiteboard or chalkboard
Goal for today: Students will calculate percent change and a simple price index, and explain how inflation reduces
purchasing power and real wages.
Before the bell
☐ Copy the worksheet, one per student (2 pages).
☐ Write on the board: PERCENT CHANGE = (new − old) ÷ old × 100. INFLATION = a general rise in prices over
time. PURCHASING POWER = what your money can buy.
☐ Also write: PRICE INDEX = (cost of basket now ÷ cost of basket in base year) × 100. The base year always
equals 100.
☐ Keep the answer key on your desk. Calculators are recommended.
Say this to start
Good morning! Today is an economics lesson on inflation, which means prices going up over time. You will look at the
prices of five everyday items in two different years, calculate how much prices rose, and figure out what that means
for a worker’s paycheck. The formulas are on the board.
Run of show
Minutes
What you do
What students do
0–5
Take attendance. Hand out the worksheet face down.
Wait for directions.
5–13
Read the board aloud. Example: a snack costs $2.00, then
$2.50. Change = 0.50. 0.50 ÷ 2.00 = 0.25 = 25%.
Listen and copy the formula.
13–25
Tell students to fill in the % change column in the table.
Calculate each price change.
25–40
Tell students to complete questions 1–7, the calculation
problems.
Calculate totals, index, and real wage.
40–47
Tell students to answer questions 8–13.
Answer multiple choice, true-false and a
short answer.
47–50
Collect worksheets.
Hand in work.

SubstitutePlans.com
Social Studies · Economics
SP-ECON-004 · Free to print and use in your classroom · substituteplans.com
Page 3
If things go wrong
• If students get decimals that do not round neatly, tell them to round to the nearest cent or tenth of a percent.
• If students are unsure which price is ‘old,’ remind them: the older year (2015) is the starting point.
• If students ask about real prices, tell them the numbers are made up.
• If students finish early, check the table and use the early finisher list.
Early finishers
• Name one item that has gotten more expensive in your lifetime and one that has gotten cheaper. Why do you
think prices changed?
• Write two sentences explaining why a raise might not make a worker better off.
Support and challenge
• Support: Allow calculators and have students complete the table and questions 1–3 and 8–9 only.
• Challenge: Ask students to find which item had the largest percent increase and say what that means for
people who buy it often.
Notes for the teacher (you fill this in)
Jot a few lines before you leave. A full Daily Sub Report is in the free Sub Survival Kit at SubstitutePlans.com.
How far the class got / what to pick up next:
Students who were especially helpful:
Anything the teacher should know: