Airplane Production: A Law of Diminishing Marginal Product Exercise
In this experiment, students engage in production of paper airplanes using some fixed inputs of production. In successive rounds of production, additional units of labor are added to the fixed inputs. Students record output levels at the various levels of labor input. This data can then be used to calculate average and marginal products of labor. This exercise clearly illustrates the law of diminishing marginal product.
Context for Use
Description and Teaching Materials
Provide students with airplane folding instructions. A simple design is best.
Start by running through the folding of an airplane once.
Once everyone is clear on how to fold the airplanes, divide students into production groups of 2 or 3. Distribute a manila folder (factory truck) and pen (for writing "Econ Glider" on each plane) to each group. These will serve as the fixed inputs to production. Designate a central location for paper distribution.
Allow students production runs of 3 minutes. Students will use their factory truck to get paper (one sheet at a time) from the distribution center. They must finish producing the airplane including writing "Econ Glider" on a wing and then successfully complete a test flight for the plane to count as completed.
At the end of the production run, count the number of planes produced by each producting group and record the data.
After the each production run combine two groups of students to increase the amount of labor. Be sure to remove pens and folders such that each group has only one of each. Continue increasing group size until the entire class is working together as a single group.
Lead students through calculating the average and marginal products of labor in each production round. The results will show students that the marginal product of labor will eventually fall as additional labor is added to the fixed inputs. Elicit reasons for this result from students.
Chapter 10 in "Experiments with Economic Principles: Microeconomics," 2nd Edition by Theodore Bergstrom and John H. Miller (Irwin/McGraw-Hill Publishers), 2000. Instructors should also request a copy of the Instructor's Manual.
Teaching Notes and Tips
Variants on this experiment include the production of alternative products and are discussed in the following.
Hazlett, Denise. Economic Experiments in the Classroom. Reading, MA: Addison Wesley Longman, 1999. (Experiment #8)
Yandell, Dirk. Using Economic Experiments in the Classroom. Upper Saddle River, New Jersey: Prentice Hall, 1999a. (Experiment #6)
Neral, John. (1993). "Widget Production in the Classroom." Classroom Expernomics (http://www.marietta.edu/~delemeeg/expernom.html), 2.
Student achievement can be determined through students' contributions to the debriefing discussion. Further, "Experiments with Economic Principles: Microeconomics" includes homework exercises developed to accompany this activity.