Question

How Much Did Things Cost in the “Good Old Days”?

Have you ever heard your parents or grandparents say, “Back in my day, a loaf of bread only cost a nickel and a gallon of gas only cost a quarter”? How can it be that things were so much cheaper back then? Were they really cheaper? You will try to answer this question by comparing modern prices to historical prices and calculating the percent increase in prices. To do so, you will examine prices of two goods: movie tickets and a McDonald’s Big Mac®.

Calculating Percent Change in Price

Percent change in price is calculated by dividing the amount of change in price by the original price and multiplying the result by 100. If the price has increased, percent change will be positive, and if the price has decreased, the percent change will be negative. The formula for calculating percent change in price:

New price – Old price × 100       OR        Price (Year 2) – Price (Year 1) × 100

Old price                                               Price (Year 1)

Historic Prices

Goods	Price in 1986 (nominal price)	Price in 2019 (nominal price)	Percent Change in Nominal Price
Movie Ticket	$3.71	$9.25
McDonalds Big Mac	$1.80	$3.99

1. Which item had the largest percent increase in price?

2. Prices seem so low in 1967. Were people much better off then? What else would

you need to know to draw a conclusion?

Answer 1