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The price is correct: activity

Introduction

In this activity, you will learn about inflation and price changes. When items increase in price, we call that inflation; when they decrease in price, we call it deflation. In general, prices have increased over time. Measuring inflation provides us with information about the buying power of a dollar. The Bureau of Labor Statistics (BLS) collects prices on products and services to develop a measure of inflation called the Consumer Price Index (CPI). BLS also publishes average prices collected for some food and utilities. Average prices are determined by adding all of the prices for a specific product or service we collect in one month and dividing by the total number of prices collected. This gives us a sense of what a person normally spends on a good or service.

Objective

After completing this activity, you will have a better understanding of inflation and how prices change over time. You will also be able to identify the BLS CPI program as a primary source of inflation data.

Activity

Think about prices that you have seen at stores for the items listed below and what you would expect to pay. Write down what you think the prices of these goods are now and what they were in a previous year (your teacher will tell you which year). You should also consider why the prices of these items have changed. Use the CPI BLS data to determine the current average price of commonly used goods. Then check to see how close your estimates are to BLS average price data. After this exercise, discuss prices, inflation, and the Consumer Price Index. More information about the CPI can be found on the CPI Frequently Asked Questions page.

Directions

1. Estimate and write down the current prices for the items listed below, then write what you think they were in a year specified by your teacher. Your teacher may award point(s) to the person or team with the closest initial estimates. Enter your responses in the estimates worksheet.
2. Access the Average Price Database Search tool.
3. Select U.S. City Average. Click “Next form.”
4. Select any item on the list then press and hold the “Ctrl” key to select the other listed items:
   

   1 lb white rice, uncooked
   1 lb white bread
   1 lb chocolate chip cookies
   1 lb ground beef
   1 lb bacon
   1 dozen grade A large eggs
   1 lb bananas
   1/2 gallon ice cream
   1 lb potato chips
   1 gallon regular unleaded gas

5. Once all of the items are selected, click “Next form.”
6. Select the “Retrieve Data” button. The data will appear in charts on the next page. You can view data for earlier years by changing the date range using the drop-down bars above the tables.

Last Modified Date: January 10, 2019