Lesson Plan

• Describe the definitions and formulas for the Average Rate of Tax (ART) and Marginal Rate of Tax (MRT).
• Calculate ART and MRT from a given tax schedule for different income levels.
• Analyse how progressive, proportional and regressive tax structures affect ART and MRT.
• Explain the impact of ART and MRT on household disposable income, firm profits and the circular flow of income.
• Evaluate how changes in MRT influence labour supply and investment decisions.

• Projector and screen
• Printed tax‑schedule handout (incl. brackets and rates)
• Worksheets with calculation tasks
• Calculators (or spreadsheet access)
• Whiteboard and markers
• Exit‑ticket slips

Begin with a quick poll: “What percentage of your earnings do you think goes to tax?” Use the responses to highlight common misconceptions. Review the circular flow model and how taxes move money from households and firms to the government. State that by the end of the lesson students will be able to calculate and interpret both ART and MRT and link them to economic behaviour.

1. Do‑now (5’) – Students complete a short recall quiz on the circular flow and basic tax concepts.
2. Mini‑lecture (10’) – Define ART and MRT, present the formulas, and illustrate with the provided tax schedule.
3. Guided example (15’) – Work through the £60,000 taxpayer calculation step‑by‑step; students fill in a worksheet.
4. Group activity (10’) – Teams compare progressive, proportional and regressive systems using the schedule and record the relationship between ART and MRT.
5. Class discussion (10’) – Link findings to the circular flow: effects on household disposable income, firm profits, government revenue and behavioural responses.
6. Check for understanding (5’) – Exit‑ticket: “State one way a higher MRT could affect labour supply.”

Summarise the key distinctions between ART and MRT and their relevance to tax policy. Collect the exit‑tickets to gauge understanding and assign homework: students must create a short report evaluating how a change in MRT would impact investment in a chosen industry. Remind them to bring their worksheets for the next class.