Lesson Plan

• Describe how labour supply and demand determine the equilibrium wage.
• Explain the key determinants (human capital, skill specificity, industry profitability, geography, discrimination, union power, monopsony) that create wage differentials.
• Analyse the effect of shifts in supply or demand on wage levels using appropriate diagrams.
• Evaluate how government interventions (minimum wage, anti‑discrimination legislation) influence wage gaps.

• Projector and screen
• PowerPoint slides summarising determinants
• Printed worksheets with supply‑demand tables
• Graph paper and coloured pens
• Calculators
• Handout of the summary table of wage determinants

Start with the question: “Why might two workers with the same skills earn different wages?” Connect to students’ prior knowledge of basic labour‑market equilibrium. Explain that today they will identify the forces that create these differences and how to recognise them in diagrams.

1. Do‑now (5’) – short quiz on supply, demand and equilibrium wage.
2. Mini‑lecture (10’) – review the labour‑market model and introduce the list of wage‑differential determinants.
3. Group activity (10’) – using the supplied tables, each group predicts the direction of wage change for a given shift in supply or demand.
4. Diagram work (8’) – students draw supply‑demand curves showing shifts for skilled vs. unskilled labour and label the resulting wage differentials.
5. Case‑study discussion (8’) – analyse real‑world examples of discrimination, union power and monopsony; relate back to the theory.
6. Check for understanding (4’) – exit‑ticket question: “Name two market forces and one government policy that can widen wage gaps.”

Summarise how both market forces and policy interventions shape wage differentials. Collect the exit tickets to gauge understanding, and assign a brief homework: research a recent minimum‑wage change in their country and predict its impact on low‑skill wages.