Math 110 Activity 6
Open the CPI file to use for this activity.
1. Converting to Constant Dollars
A. Your mother says that when she was a teenager in 1980 she babysat for
neighbors and was paid $3.50 per hour. What is a comparable wage today?
Convert her wage to 2020 constant dollars to answer.
(Newer/ older) * older
(258.8/ 82.4) * 3.50
A comparable wage today is $10.99
B. As the old song goes, “Shave and a haircut--two bits”. Two bits are equal
to one quarter. Assuming the song originated in 1912, how much would that
shave and a haircut cost in today's money? Convert the price to 2020 constant
dollars to answer.
(Newer/ older) * older
(258.8/ 9.8) * .25
In 2020 the shave and haircut would cost $6.60 in today’s dollars
C. In 1935 movie Night at the Opera, Groucho Marx swindles Margaret
Dumont to pay for his dinner at a fancy restaurant. His meal alone cost $9.40.
How much, in today’s money, did she pay for his five-star meal? Convert the
cost to 2020 constant dollars to answer.
(Newer/ older) * older
(258..7) * 9.40
In 2020 the meal would cost $177.57
2. Comparing Prices
A. The annual average price of a gallon of gasoline in 1980 was $1.22. In
2010 it was $2.74. Was gas more expensive in 1980 or in 2010? Convert the
1980 price to 2010 constant dollars and then compare it to the actual price in
2010 to answer. Was gas more expensive in 1980 or in 2010? Explain your
reasoning.
New/ old= 2.74/1.22
= 2.25
.
, Gas costs 2.25 times more in 2010 than it did in 1980.
Open the CPI file to use for this activity.
1. Converting to Constant Dollars
A. Your mother says that when she was a teenager in 1980 she babysat for
neighbors and was paid $3.50 per hour. What is a comparable wage today?
Convert her wage to 2020 constant dollars to answer.
(Newer/ older) * older
(258.8/ 82.4) * 3.50
A comparable wage today is $10.99
B. As the old song goes, “Shave and a haircut--two bits”. Two bits are equal
to one quarter. Assuming the song originated in 1912, how much would that
shave and a haircut cost in today's money? Convert the price to 2020 constant
dollars to answer.
(Newer/ older) * older
(258.8/ 9.8) * .25
In 2020 the shave and haircut would cost $6.60 in today’s dollars
C. In 1935 movie Night at the Opera, Groucho Marx swindles Margaret
Dumont to pay for his dinner at a fancy restaurant. His meal alone cost $9.40.
How much, in today’s money, did she pay for his five-star meal? Convert the
cost to 2020 constant dollars to answer.
(Newer/ older) * older
(258..7) * 9.40
In 2020 the meal would cost $177.57
2. Comparing Prices
A. The annual average price of a gallon of gasoline in 1980 was $1.22. In
2010 it was $2.74. Was gas more expensive in 1980 or in 2010? Convert the
1980 price to 2010 constant dollars and then compare it to the actual price in
2010 to answer. Was gas more expensive in 1980 or in 2010? Explain your
reasoning.
New/ old= 2.74/1.22
= 2.25
.
, Gas costs 2.25 times more in 2010 than it did in 1980.
