Short-run production function examples
Initial Publication Date: August 19, 2018
Summary
Upon completion of this application exercise, each student should be able to describe the typical short-run production process of a firm and explain the concept of diminishing marginal product accurately.
CollapseContext for Use
This AE is appropriate for a Principles of Microeconomics course. Students should have completed the readiness assurance process for the unit that describes the firm's short-run production process and the concept of diminishing marginal product.
Description and Teaching Materials
Please spend a minute or two as individuals considering the production process at a business where you have worked directly in or observed the operation of a firm. Think of a short-run production example that exhibits diminishing marginal returns.
As individuals, jot down in your notes the following:
Process description.
Why do the diminishing returns happen?
Make a table that has labor input in the first column and output in the second. This table does not have to be precisely accurate but it should illustrate the phenomenon of diminishing marginal product.
Now, as a team, discuss each student's example and decide on which one is worthy of being the team's example. Your team probably has many good examples so flip coins or borrow the Spinny Wheel to decide among them if there is not one that is the consensus best choice.
Write up the team's example large in Sharpie ink on an 11' by 17' sheet of paper. Bonus points for illustrations!
Gallery walk reporting!
Teaching Notes and Tips
This AE is a bit different from most of the AEs in my course. The AE offers students a welcome change of pace in a unit of the microeconomics principles course that features many new vocabulary words but a fairly small number of important concepts, chief among them the idea of diminishing marginal product as variable inputs are added to a production process in the presence of fixed factors.
In the gallery walk report, the teacher should have an eye out first for the correctness of team examples. In my experience, there is about one in ten examples that is not, in fact, an example of diminishing marginal product. I make sure to include the reporters for such team in the group that I will bring to the front of the class to explain their examples. As facilitator in the debriefing process, make sure to elicit the definition of the short run from student reporters, as well as an explanation of the diminishing returns phenomenon and why it occurs. Most of the examples turn out to be really good and students have fun drawing them up and explaining them. As always, randomize reporters so most teams will have a reporter explaining an example that comes from another student.
In the gallery walk report, the teacher should have an eye out first for the correctness of team examples. In my experience, there is about one in ten examples that is not, in fact, an example of diminishing marginal product. I make sure to include the reporters for such team in the group that I will bring to the front of the class to explain their examples. As facilitator in the debriefing process, make sure to elicit the definition of the short run from student reporters, as well as an explanation of the diminishing returns phenomenon and why it occurs. Most of the examples turn out to be really good and students have fun drawing them up and explaining them. As always, randomize reporters so most teams will have a reporter explaining an example that comes from another student.
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Assessment
Assessment of student understanding of diminishing returns would take place in the form of a question or two on this topic in the end-of-module quiz for the unit.