Minecraft
Preparation
Lesson Narrative
Students calculate the impact of inflation on purchasing power over time. They will analyze the Consumer Price Index (CPI) and compute the mathematical difference in the cost of living between various geographic locations.
Learning Goals
• Calculate historical inflation rates.
• Define purchasing power.
• Compare cost of living indexes across geographic regions.
Student Facing Learning Goals
Let's calculate how inflation steals our money's value over time and why living in different cities costs wildly different amounts.
Student Facing Learning Targets
• I can calculate inflation over time.
• I can explain purchasing power.
• I can compare the cost of living between two cities.
Required Academic Standards
National Jump$tart Standards:
• Spending and Saving (Standard 1): Develop a plan for spending and saving.
Glossary Entries
Inflation: The general increase in prices and fall in the purchasing value of money.
Purchasing Power: The financial ability to buy products and services, determined by the value of a currency.
Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services.
Cost of Living: The amount of money needed to sustain a certain standard of living in a specific location.
Lesson
Warm Up
1.4.1: The 1990 Dollar
Launch: Have students stand in randomized groups of 3 at vertical whiteboards. Present the prompt verbally. Give them 4 minutes.
Synthesis: Select two groups to share. Establish the baseline: The number on the dollar bill stays the same, but the amount of groceries it can actually buy shrinks every single year.
Student Facing Task
In 1990, a movie ticket cost $4.00. Today, that exact same movie ticket costs $15.00.
1. Did the movie theater drastically improve the experience, or did the value of the physical dollar bill decrease?
2. If you buried $1,000 in your backyard in 1990 and dug it up today, did you gain or lose wealth?
Activity 1
1.4.2: Purchasing Power Math
Launch: Keep students at whiteboards. Project the inflation scenario. Give groups 8 minutes to run the calculations.
Synthesis: Have the class observe the boards. (Teacher Key: If inflation is 5%, you must earn 5% more just to break even. A 2% raise during 5% inflation is mathematically a 3% pay cut).
Student Facing Task
You make $50,000 a year. The government announces that inflation this year hit 5%.
1. Calculate exactly how much extra money you need to earn next year just to buy the exact same amount of food and housing.
2. If your boss gives you a 2% raise, are you richer or poorer than you were last year?
Activity 2
1.4.3: Geographic Cost of Living
Launch: Present the city comparison scenario. Give groups 8 minutes to analyze.
Synthesis: Facilitate a class debate. (Key: A high salary is an illusion if the cost of housing and food wipes it out. You must always adjust salary offers based on the local cost of living index).
Student Facing Task
You get two job offers right out of college:
• Offer A: $70,000 a year living in rural Ohio.
• Offer B: $100,000 a year living in Manhattan, New York.
1. Why is Offer B mathematically likely to leave you with less leftover cash at the end of the month?
2. What specific expenses drive the "Cost of Living" up in a major city?
Lesson Synthesis
Narrative: Bring the class back to their seats. Review the learning targets. Summarize: "Inflation is an invisible tax on your wealth. If your money is just sitting in a checking account, it is slowly dying. Furthermore, never accept a job offer based purely on the salary number; always divide it by the local cost of living."
Cool Down
1.4.4: The Pay Raise Trap
Narrative: This exit ticket serves as a formative assessment on purchasing power. Teacher Rubric: A successful response must calculate that the worker is losing 3% of their purchasing power because the cost of goods is rising faster than their income.
Student Facing Task
A worker is very excited because they received a 4% raise at their job. However, national inflation is currently at 7%. Mathematically, why should this worker actually be upset?