Monday, October 19, 2009

Marginal Product Calculation for AP Microeconomics

Summary: What happens to output when a firm adds more and more of a variable input to a fixed input?  Eventually diminishing marginal returns set in. 

In Favorite Ways to Learn Economics by David Anderson and James Chasey have an experiment "Econville Links Factory" in which students make links.  I have modified the experiement so that students have to make "M's" for Muscatine.  Students graph total product and marginal product and learn how marginal cost is related to marginal product.  Here are the steps I used to make the M's.

1.  I have a stack of 4" X 4" paper squares, a pair of scissors, and a purple marker.  The work is completed on a desk.  My rule is that a worker has to be at least touching the desk to be in the factory. 

2.  I add one worker and give the worker 30 seconds to make as many M's as possible.

3.  After tbe round I record the total amount produced.

4.  I repeat steps 2 and 3 until I have hired six workers.

Typical results are: 4, 10, 18, 24, 28, and 30. 

I then ask students to look at the total product curve and identify when diminishing marginal returns set in.  I show how specialization lead to a greater production of goods with less resources.  I always thank Mr. Anderson for this lesson has it is also used to show a difficult concept.

About the Author: Mike Fladlien is an AP Economics teacher from Muscatine High School in Muscatine, IA. He is an author, and blogs at Mikeroeconomics.  Mr. Fladlien believes that a solid background in economics is the foundation for all decisions.


CTTeacher said...

I just stumbled onto your blog and I appreciate all of the great content. I was an economics major in college but I haven't taught economics before. It's great to find engaging lessons like this one. Thanks!

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