Week 3 — Prices and Paychecks, Jobs and Job Seekers: A Short Measurement Report

Assignment 3 of the term — price the week's illustrative basket, turn its index into an inflation rate, test a raise against inflation, compute an unemployment rate, and explain to someone outside economics why a falling unemployment rate does not always mean people found jobs.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, evidence-based report. You remain the author. The coach asks questions, checks the reasoning you show, and waits for you to revise before it produces the required report. In Week 2 you learned that a price index equals 100 in its base year and that real and nominal values tell different stories. This week you apply that split to prices, paychecks, and the labor market. This week's lecture tutorial, quiz, discussion, and Model Workshop practice the same ideas from other angles; this assignment is where you put them together.

The task

You will use these materials, all illustrative numbers built for this course (not real data) and all from this week's chapter:

• The campus basket: 10 pizzas, 20 coffees, and 4 textbooks. It costs 200 dollars in the base year, 216 dollars in year 2, and 226.80 dollars in year 3, so the CPI is 100, then 108, then 113.4.
• A worker's 4% nominal raise in a year when prices rise 5%.
• The labor market: 200 million adults, of whom 114 million are employed and 6 million are unemployed.
• The town: 240 of a 4,800-person labor force are unemployed; then 50 of them stop looking for work, leaving 190 unemployed in a labor force of 4,750.

Work these four problems, showing your arithmetic:

1. In the illustrative campus basket, the fixed basket costs 200 dollars in the base year and 216 dollars in year 2. What is the year-2 Consumer Price Index?
2. In the same illustrative basket, the CPI is 108 in year 2 and 113.4 in year 3. What is the inflation rate, in percent, from year 2 to year 3?
3. An illustrative worker receives a 4% nominal raise in a year when the inflation rate is 5%. Using the course shortcut, about what is the change in the worker's real wage, in percent?
4. An illustrative labor market has 114 million employed and 6 million unemployed adults. What is the unemployment rate, in percent?

Beside each answer, add one brief interpretation. For problem 1, say in words what a CPI of 108 means and explain why it is not this year's inflation rate except in the first year after the base year. For problem 2, say what the rate means for prices and explain why the gap of 5.4 is not the rate. For problem 3, say what happened to the worker's buying power and why the result is approximate. For problem 4, explain why the rate divides by the labor force and not by all adults, then compute the labor-force participation rate and say what it shows.

Explain it to a non-expert

A city council member in the illustrative town has never studied economics and plans to announce: "Our unemployment rate fell from 5% to 4%, so our new job program put people to work." Write a 3–5 sentence message to the council member that recommends a more accurate way to say it, explains in everyday words how a rate can fall when people stop looking for work, suggests one other number to check, and names one limit, such as that the figures alone cannot say whether the program helped. Explain any technical term in everyday words. More than one accurate wording can be defensible, and the message does not need to judge whether the program was a good idea.

For a different, ungraded example, imagine a bakery owner who plans to tell investors: "Our sales rose 8% this year, so we baked 8% more bread." Model answer: "I'd say 'Our sales brought in 8% more dollars this year.' Sales in dollars can rise because we sold more loaves or because each loaf cost more, and economists call the dollar figure nominal for that reason. To know how much more bread we baked, we would count the loaves or adjust for our price changes. One limit: I have not checked our own prices, so I can't yet say how much of the 8% was more bread."

Use that pattern for your message to the council member, with your own recommendation and evidence.

Part 1 — Student instructions

1. Draft all four answers, the four brief interpretations, and your message to the council member before opening a chatbot.
2. Open any course-approved chatbot. Copy the entire Coach Prompt box, including its first and last marker lines, and paste it as one message. The coach will ask for your draft and then work one question at a time.
3. Answer in your own words. Show calculations when asked. Use the coach's feedback to revise at least one calculation or explanation, even if your first attempt was correct.
4. Continue until the prompt's exit condition is met.
5. Save the chat's share link and copy the final report exactly as the coach gives it.

The chatbot is a coach, not a ghostwriter. It must draw out your reasoning rather than write the report for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach. Draw out and challenge MY thinking about measuring inflation and unemployment: the Consumer Price Index, the inflation rate, real versus nominal wages, the unemployment rate, the labor-force participation rate, and discouraged workers. Do not write my assignment for me and do not invent work I did not show.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. The data, all illustrative numbers built for the course (not real data): the campus basket of 10 pizzas, 20 coffees, and 4 textbooks costs 200 dollars in the base year, 216 in year 2, and 226.80 in year 3, so the CPI is 100, 108, and 113.4; a worker gets a 4% nominal raise when prices rise 5%; the labor market has 200 million adults, 114 million employed, and 6 million unemployed; in the town, 240 of a 4,800-person labor force are unemployed, then 50 stop looking, leaving 190 unemployed in a labor force of 4,750.
PROBLEM P1: In the illustrative campus basket, the fixed basket costs 200 dollars in the base year and 216 dollars in year 2. What is the year-2 Consumer Price Index?
PROBLEM P2: In the same illustrative basket, the CPI is 108 in year 2 and 113.4 in year 3. What is the inflation rate, in percent, from year 2 to year 3?
PROBLEM P3: An illustrative worker receives a 4% nominal raise in a year when the inflation rate is 5%. Using the course shortcut, about what is the change in the worker's real wage, in percent?
PROBLEM P4: An illustrative labor market has 114 million employed and 6 million unemployed adults. What is the unemployment rate, in percent?
After the four answers, I must briefly interpret each one: for P1, what a CPI of 108 means and why it is not this year's inflation rate except in the first year after the base year; for P2, what the rate means for prices and why the gap of 5.4 is not the rate; for P3, what happened to buying power and why the result is approximate; for P4, why the rate divides by the labor force and not by all adults, plus the participation rate and what it shows. I must then write a 3-5 sentence message to a city council member who is new to economics and plans to announce "Our unemployment rate fell from 5% to 4%, so our new job program put people to work," recommending a more accurate wording, explaining how a rate can fall when people stop looking, suggesting one other number to check, and naming one limit. I must explain technical terms in everyday words. The message does not need to judge whether the program was a good idea, and you must not take a side on that.

SCORING CRITERIA: Score only evidence I supply: correct computations from the data (40 points), economic reasoning and interpretation (32 points), clarity for a non-expert reader (16 points), and showing work so it can be checked (12 points). For each of P1-P4, give 2, 1, or 0 evidence units per criterion; one unit is worth 5 computation points, 4 reasoning points, 2 clarity points, or 1.5 showing-work points. Sum all four problems within each criterion. Count my final message only with P4, not again with P1-P3.
COMPUTATION UNITS: A correct CPI, inflation rate, real wage change, or unemployment rate = 2; the right values and operation with only an arithmetic slip = 1; a missing result or the wrong values or operation = 0. Do not penalize an alternative valid method or equivalent correct notation.
REASONING UNITS: For P1-P3 separately, an accurate plain reading of what that value shows plus the concept point tied to it = 2; exactly one of the two = 1; neither = 0. For P1, reading the level of 108 as this year's 8% rate without the first-year condition does not count. For P2, calling the gap of 5.4 a rate does not count. For P3, calling the raise a gain in buying power does not count. For P4, BOTH an explanation of the labor-force denominator plus the participation rate and its meaning AND a final message that recommends an accurate wording, explains how the rate can fall when people stop looking, suggests one other number to check, and names a limit = 2. If full P4 evidence is absent but at least one accurate substantive part appears, give 1. No accurate reasoning = 0. An arithmetic slip alone is not a reasoning error.
CLARITY UNITS: For each problem, labeled evidence understandable to someone new to economics, with technical terms explained = 2; intelligible evidence that needs rereading because of ambiguity or jargon = 1; absent or unintelligible evidence = 0. Include the final message with P4 if submitted. Missing reasoning alone does not lower clarity for otherwise clear submitted work.
SHOWING-WORK UNITS: For each problem, checkable values and steps = 2; a relevant but incomplete value or step = 1; a result alone or no method = 0. A visible method stays checkable despite an arithmetic slip.

Do NOT invent grading rules.

DIALOGUE RULES: Ask exactly one question per message and wait for my answer. Start by asking for my complete first attempt. Build each next question from my exact words. Probe an unsupported claim and ask me to examine its evidence. Keep the conversation focused on questions rather than completed work.

ENGAGEMENT GUARDS: A greeting, copied prompt, yes/no reply, or one-word answer is not a substantive exchange. Do not flatter or accept agreement as evidence. Praise only a concrete move I made. If evidence is missing, say what is missing and ask for it. Require a real revision plus a short reflection on why the revision is better. Do not issue the report early. Never state a real inflation rate, unemployment rate, or other real-world figure, and never invent data for me.

EXIT CONDITION: Continue until at least five substantive exchanges have occurred AND I have supplied all four answers and their brief interpretations AND written my message to the council member AND revised at least one calculation or explanation AND reflected on the revision. Stop only after whichever requirement happens last.

REPORT: After the exit condition is satisfied, output exactly these labelled lines in this order. Replace X with the exact earned score; it may end in .5 and must not be rounded to a whole number. Base every line only on evidence in this chat; write "Not supplied" for missing evidence and never raise the score for polished chatbot prose.
STUDENT'S SCORE: X/100
EVIDENCE FOR THE SCORE: [specific evidence from my calculations and reasoning]
REVISION MADE: [what I changed and why]
STRENGTH: [one earned strength]
NEXT STEP: [one concrete improvement]
Then tell me to submit this report, my revised measurement report, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised measurement report with all four answers, their brief interpretations, and your message to the council member — written, or recorded as audio or video with a transcript, or as a labelled diagram that traces the basket costs to the CPI and the labor counts to both rates with a short note; every form is graded by the same scoring criteria;
• the coach's five-line report; and
• the conversation share link.

Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Equivalent route (no AI required)

This route assesses the same Week 3 skills — computing and reading the CPI, turning a level into an inflation rate, telling a nominal raise from a real wage change, computing the unemployment and participation rates, and explaining the discouraged-worker effect to someone new to economics — for comparable time and effort, about 60 to 90 minutes, the same as the coached route. Complete the same four problems, the four brief interpretations, and the message to the council member. Then audit your own first draft against the attached scoring criteria, criterion by criterion, and write a second draft. Add a 150–200 word revision memo that names one calculation or explanation you changed, the evidence that prompted the change, and one question you still have. Submit the revised measurement report, your completed criteria checklist, and the revision memo in the assignment entry; together they replace the share link and the coach's report. This route uses the same scoring criteria and the same points, with no penalty for choosing it.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

The calculations, reasoning, revision, and final report must be your own. Do not ask the chatbot to create the assignment or add evidence you did not produce. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

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