Lesson Plan

• Describe what economic rent means in the context of labour markets.
• Explain how the reservation wage and actual wage determine the size of economic rent.
• Identify at least three sources of economic rent (skill‑specific, geographical, regulatory, monopsony).
• Analyse how government interventions can increase or reduce economic rent.
• Apply the concept to a real‑world example and calculate economic rent using a simple formula.

• Projector and screen
• PowerPoint slides with definition, formula and diagram
• Printed handout of the “Types of Economic Rent” table
• Worksheet for calculating economic rent (sample data)
• Whiteboard and markers
• Exit‑ticket slips

Begin with a quick poll: “What profession do you think earns more than strictly necessary for the work they do?” Use responses to highlight the idea of surplus earnings. Briefly recap reservation wage from the previous lesson and state today’s success criteria: students will be able to define economic rent, identify its sources, and calculate it.

1. Do‑now (5’) – Students write a one‑sentence definition of “reservation wage”. Teacher checks a few responses.
2. Direct instruction (10’) – Present the formal definition of economic rent, the formula, and the supply‑demand diagram.
3. Guided practice (12’) – Work through a sample calculation on the board using given actual and reservation wages.
4. Group activity (15’) – In pairs, students analyse the handout table, match each type of rent to its source and discuss possible policy responses.
5. Whole‑class discussion (8’) – Groups share findings; teacher clarifies misconceptions about monopsony rent vs negative rent.
6. Check for understanding (5’) – Quick quiz (Kahoot or show of hands) on key characteristics and interventions.
7. Transition to conclusion (5’) – Summarise key points and outline exit‑ticket task.

Recap the definition, formula, and main sources of economic rent, linking them to the policy examples discussed. Students complete an exit ticket: write the economic rent for a given scenario and suggest one government action to address it. Assign homework to read a short case study on professional licensing and prepare a brief reflection.