Consumer Price Index Activity
In groups of 2-4:
1. Select five products most frequently purchased by
your group members to include in your market
2. Illustrate and label your products on the poster
paper, leaving space under each picture and in the
middle of the page for data and calculations.
3. For every product, calculate the average quantity
purchased in a month by the typical person in your
group. Label this quantity under the product’s
picture. You now have determined a market
4. Under each product, label its approximate prices in
October, 2008 and in January, 2009. (If none of
your products have changed in price, see me.)
5. Compute the total cost for your market basket in
both October and January.
6. Use the following formula to calculate the
Consumer Price Index for each month:
Oct. (base month) (Oct. cost)/(Oct. cost) X 100 = 100
Jan. (Jan. cost)/(Oct. cost) X 100 = ???
7. Calculate the inflation rate in percentage.
(Subtract 100 from the January index number)