Compensating Wage Differentials Lecture Plan

Mary Clare Peate
Instructional Designer
Alex Tabarrok
Professor of Economics

Lecture Objective: Students understand what “there ain't no such thing as a free lunch” really means. In other words, they can identify different types of nonmonetary compensation and how they form part of real wages.


The lesson incorporates two MRU videos about compensating wage differentials from our Principles of Microeconomics video course. We also mix in discussion prompts, exercises, practice questions, graphs and charts, and pre- and post-class assignments. Finally, we provide supplementary resources such as additional data sources, relevant news articles and blog posts, two episodes of Planet Money, and a podcast conversation between Tyler Cowen and Peter Thiel.

The lecture can be paired with any intro textbook, but is based on a chapter from Modern Principles of Economics by Tyler Cowen and Alex Tabarrok.

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