The Economics of Cupcakes: A Class Activity on the Law of Diminishing Marginal Product

Abstract

Economics courses are typically lecture-based. This paper provides an alternative to the traditional chalk and talk method of classroom instruction by outlining a class activity that illustrates the concept of diminishing marginal productivity. The activity incorporates an experiment-based learning approach with minimal direction from the instructor and offers an alternative or complement to traditional lecture-based instruction methods. Although the main lesson is the law of diminishing marginal productivity, other economic concepts can also be incorporated and learned from this experiment. Variations of the experiment and possible outcomes are also discussed.