Interactive lecture on diminishing marginal product: tennis ball production
In this interactive lecture, the engagement trigger is a demonstration in which students "produce" tennis balls with fixed capital and increasing labor, thus generating a production function. Students calculate the marginal product of each worker and discover that marginal product falls as the number of workers rises.
Context for Use
Students should already be familiar with the concepts of marginal thinking and cost-benefit analysis. The description here focuses on diminishing marginal product only but the activity could easily be extended for a more in-depth discussion of costs by adding input prices and using the data generated by the demonstration to create all the various costs curves (average, fixed, variable, etc.).
Description and Teaching Materials
Set up two buckets, several feet apart, with several tennis balls in one of the buckets. Students have a set amount of time (I use ten seconds) to move tennis balls from one bucket to another; each ball that makes it into the empty bucket counts as one unit produced. Students must carry the balls from one bucket to the other; balls cannot be thrown and any ball that bounces out of the bucket will not count. Begin with one student and then add additional 'workers' in each round, recording the total production for each round. Total production should rise for the first few rounds but eventually, diminishing marginal product should set in and total output will level off and even begin to fall, which is a good point to stop. Once you have the production function data, define marginal product and calculate marginal product for the first two or three workers in the demonstration. Then have students calculate the marginal product of each of the rest of the workers in the demonstration, and discuss why marginal product begins to fall as there are more workers.
Teaching Notes and Tips
This works well for large classes; even though only a small subset of the students are physically participating, the other students get involved by cheering on their classmates. If you have enough space, you can even set up two firms on opposite sides of the room; they will invariably try to compete with each other and while this has nothing to do with the ultimate objective (demonstrating diminishing returns), it can ensure that students really are trying to maximize their output, and the rest of the class will typically root for the firm on their side of the classroom.