Inflation and CPI Lesson Plan

Use this 50 minutes lesson plan to teach inflation and cpi through one concrete decision. Students construct a fixed basket, calculate CPI, and explain why measured inflation can differ from lived inflation. This is a complete one-period lesson, not an outline. The timing leaves room for a launch, teacher modeling, student work, discussion, and an individual check for understanding.

The classroom prompt

Use the fixed basket to find the base cost, current cost, CPI, and inflation rate. Then let the burger price double and ask whether a fixed basket captures consumer substitution.

Put the question where every student can see it and do not supply vocabulary before students commit to an answer. Their first explanation becomes the evidence you use during the debrief.

Materials and setup

Give price lists for a fixed basket of 2 burgers and 3 drinks: base prices $4 and $2; current prices $5 and $2.50.

Open the inflation module if you want students to test the same idea on an interactive model after the paper task. A projected version is enough; students do not need accounts for this lesson.

Run the lesson

Answer key and teacher moves

• Base basket cost is 2($4) + 3($2) = $14.
• Current basket cost is 2($5) + 3($2.50) = $17.50.
• Current CPI is ($17.50/$14) × 100 = 125, so inflation from the base period is 25 percent.
• A fixed basket can overstate the cost of maintaining utility when consumers substitute away from goods whose relative prices rise.

Do not give credit for the correct direction alone. Ask students to name the changed determinant, identify the curve or quantity that changes, and connect the change to the final outcome. A complete explanation contains a cause, a model move, and a result.

What to collect

Collect the basket calculation and one limitation supported by the class substitution decision.

Most likely misconception: Students add percentage price changes without weighting goods by basket quantities.

Support and extension: Give a four-cell calculation grid. Extend by comparing CPI with the GDP deflator's changing domestic-production basket.

A clean closing question

End with: What changed, what stayed fixed, and what evidence proves your conclusion? That sentence works as the final written check because it forces students to separate a cause from the movement it produces. Collect it, scan for the misconception above, and use the first three minutes of the next class to repair the pattern if needed.

This resource is ready to copy into a slide, handout, or LMS assignment. If you assign it for points, publish the success criteria before students begin: correct model, correct direction, and an explanation that links the two.