real-world applications - MathnMind
real-world applications - MathnMind
real-world applications - MathnMind
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NAME _______________________________________________________ DATE _____________________________________<br />
REAL-WORLD APPLICATIONS<br />
STUDENT ACTIVITY for Transparency 12<br />
Use with Lesson 12-2.<br />
About Consumer Price Index<br />
The Consumer Price Index, or CPI, is a historical, comparative measure that describes how the<br />
overall cost of goods and services changes over time. The goods and services itemized in the CPI<br />
are those that are considered necessary for everyday life. Examples of these goods and services<br />
include food, clothing, housing, transportation, and medical fees.<br />
The CPI uses a certain period of time from the past as a reference point. Presently, the period<br />
1982–1984 is used. Goods and services available at that time, regardless of their cost, are given<br />
the value 100. The cost of goods and services in July 2000 and July 2001 are compared to their<br />
cost in 1982–1984. If those goods and services cost, for example, twice as much in July 2001 as<br />
they did in 1982–1984, they would be listed as 200 (2 100) in July 2001.<br />
Directions: Use what you have seen and read to answer the following questions.<br />
1. Which groups of goods and services showed the least price changes from July 2000 to July 2001?<br />
The greatest? By what percent did their prices change? The least change was in the CPI for<br />
transportation, 0.4%; the greatest change was in the CPI for medical care, 4.5%.<br />
2. Which groups, if any, cost less in July 2001 than they did in 1982–1984? The cost for all items<br />
on the chart is greater than the cost in 1982–1984.<br />
3. Which groups, if any, cost less in July 2001 than they did in July 2000? The cost for apparel<br />
was less in July 2001 than in July 2000.<br />
4. The CPI for gasoline in July 2001 was 124.9. The cost of gasoline at that time was approximately<br />
$1.50 per gallon. What was the approximate cost of a gallon of gasoline in 1982–1984? $1.20 per<br />
gallon<br />
Making the Connection<br />
5. Select a college or university and determine the cost of attending that school this year. Then use the<br />
CPI percent increase for 2001 to calculate the tuition for the next four years. See students’ work.<br />
© Glencoe/McGraw-Hill T12 Glencoe Algebra 1
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