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 "S" for Sharks. 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 blue 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.