Law of Diminishing Marginal Products of Labor Activity: Promoting Understanding With Active Learning

Shengnan Fang
Learning Abstracts

The COVID-19 pandemic brought significant disruptions and challenges to higher education. The return to in-person teaching was an adjustment for both instructors and students after more than two years of remote learning, and did not necessarily mean that active learning and engagement in the classroom would automatically follow. However, interactive classroom activities can provide students with opportunities to deepen their understanding of economic concepts.

Becker and Witt (2000, 2008) investigated how economics was being taught at postsecondary institutions. Although they highlighted that traditional lecture style was still dominant in undergraduate teaching, they emphasized that classroom discussion and activities were being used in more introductory courses. Allgood et al. (2015) found that in-person classroom activities had positive effects on student achievements. DeAngelo et al. (2009) and Ongeri (2017) discussed how learners can benefit from interactive classroom activities. During the pandemic, instructors faced the major challenge of transiting in-person classes to remote formats, which could entail a lack of institutional resources or pedagogical support. Raduca et al. (2020) found that the lack of human interaction and face-to-face connections disadvantaged online learning. According to Lebec and Luft (2020), in an online format, students were less motivated to achieve designated learning outcomes. Zhu and Basdogan (2021) emphasized that students prefer variation in class activities; they developed a framework by applying pedagogical methods of active learning.

Schubert (2023) and Asarta et al. (2020) asserted that, although integrating economic concepts into interactive classroom activities can yield positive learning gains, it is an ongoing challenge for instructors to design effective and cost-efficient activities. My Introduction of Microeconomics classes reverted back to in-person gradually throughout the 2021-2022 academic year, and I was looking for ways to maintain students’ engagement by designing interactive activities. The law of diminishing marginal product is one of the critical concepts related to the cost of production, but many students find it difficult to understand what constraints to impose for this law and how to draw the curves for total production and marginal product. This article presents an interactive classroom activity with simple setup to help students to understand this concept through a designated production process.

Law of Diminishing Marginal Product Activity

Materials and Description

The activity begins with a task to produce qualified products with the following inputs.

  • Labor inputs: students
  • Capital inputs: one stapler, one marker
  • Raw materials: timer; ream of 20 pound, 92 brightness 8.5” x 11” copy and printer paper; staples

In each round of production, the capital inputs are fixed while labor inputs change. The diminishing marginal product of labor will be expected to demonstrate the pattern with the third or fourth student. To help students observe real-time changes in total production with the marginal products of labor, I use a spreadsheet with three columns to record the activity: Column one is for the workforce (number of students), column two is for outputs (number of qualified products), and column three is for the marginal product of labor. (See Appendix A.) A qualified product is made as follows:

  1. Fold a sheet of printer paper in half vertically and then horizontally. Do not unfold.
  2. Staple that piece of paper in the center.
  3. Use a marker to draw a diagonal line from one corner to the opposite corner, then repeat with the remaining corners.


At the beginning of class, I introduce the production task process and recruit students to participate in this activity. I also act as the scorekeeper, quality control inspector, and time monitor. The activity begins with hiring one student to produce the product within one minute. I count the total output of the qualified products in the first round and record it on the spreadsheet. The spreadsheet is projected to a screen so all the students can observe the real-time changes in the number of laborers being hired, the total output, and the marginal product of labor.

In the second round, one more student is recruited to work with the first student, and the two work together to make the products within one minute. When the processing time is over, I increase the number of the workers to two on the spreadsheet and enter the new total output of the qualified products.

This activity continues by adding one more student for each round while keeping the capital—one stapler and one marker—constant. Since students work together and students with varying skills may join, by the second or third round, students can see their productivity increase at first. However, due to the fixed equipment and time limit, the marginal product of labor will decrease by the fourth round.

Summary of Learning Outcome

The purpose of this activity is for students to witness output changes when the quantity of labor is gradually increased while other factors, such as capital and time, remain constant. When the activity is over, I give the students a handout with reflection questions (see Appendix B). To facilitate discussion, the students are encouraged to work in pairs for about 10 minutes to answer the questions. Typically, I do not introduce the law of diminishing marginal product of labor before the activity. In the debriefing session, I ask students to provide their own definitions of labor and capital and help them to make the connection between the activity and the law of diminishing marginal product. Although only some students participate in the production process, the debriefing session provides the opportunity for all students to discover the trend of changes in marginal product of labor.

In the interactive discussion, I also facilitate students’ exploration and understanding of the law of diminishing marginal product of labor through the visual representations. Table 1 is an example of the production outcomes observed in this activity.

Table 1: Production Outcomes From Law of Diminishing Marginal Product Activity

This table shows outcomes from one of my fall 2022 Introduction of Microeconomics classes.

Figure 1 illustrates the variations in total output as additional students are hired to participate in the production process, while Figure 2 shows the changes in marginal product of labor when an increasing amount of labor is introduced.

Figure 1: Total Output and the Labor Input
Figure 2: Marginal Products of Labor and Labor Input

After the discussion session, I introduce the law of diminishing marginal product of labor. Instead of lecturing this law at the beginning of class, the activity and debriefing session provide an active, hands-on opportunity for students to learn this concept.


In the post-pandemic period, lecture is still the predominate teaching style in institutions of higher education (Picault, 2019). According to Becker and Watts (2001), “more than most other academics, economics instructors should recognize that it is important to consider alternatives when they decide how to teach” (p. 450). Students often struggle to grasp the connections between marginal product with changes in one input while keeping other inputs constant. The described classroom activity offers a great opportunity to present the law of diminishing marginal products to students in an interactive fashion. This activity is designed with very few pre-class preparations and using simple instructions. The activity and debriefing session can promote student-instructor interaction and active cooperation among students. And from what I've observed, students remember the concept of diminishing marginal productivity well beyond the term’s end, which indicates long-term retention of this concept.


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Asarta, C. J., Chambers, R. G., & Harter, C. (2021). Teaching methods in undergraduate introductory economics courses: Results from a sixth national quinquennial survey. The American Economist66(1), 18-28.

Becker, W., & Watts, M. (2001). Teaching economics at the start of the 21st century: Still chalk-and-talk. The American Economic Review, 91(2), 446-451.

DeAngelo, L., Hurtado, S., Pryor, J., Kelly, K., & Santos, J. (2009). The American college teacher: National norms for the 2007-2008 HERI Faculty Survey. Higher Education Research Institute, University of California, Los Angeles.

Lebec, M., & Luft, J. (2020). A mixed methods analysis of learning in online teacher professional development: a case report. Contemporary Issues in Technology and Teacher Education, 7(1), 554-574.

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Schubert, J. (2023). Using the Becker-DeGroot-Marschak mechanism to teach willingness to pay and consumer surplus. Journal of Economics Teaching, 8(1), 1-11.

Watts, M., & Becker, W. E. (2008). A little more than chalk and talk: Results from a third national survey of teaching methods in undergraduate economics courses. The Journal of Economic Education, 39, 273-286.

Zhu, M., & Basdogan, M. (2021). Examining social learning in an active learning classroom through pedagogy-space-technology framework. Journal of Learning Spaces, 10(1), 15-26


Appendix A: Spreadsheet to Record the Number of Products Made by Students
Appendix B: Discussion Questions for Debriefing Session
  1. How would you define labor input and what can be considered as labor input in this activity?
  2. How would you define capital input? What can be considered as capital input in this activity?
  3. What do you observe when the second student is “hired” to join the production? Does the total output increase or decrease and by how many products?
  4. What do you observe when the third student is “hired” to join the production? Does the total output increase or decrease and by how many products?
  5. What do you observe when the fourth student is “hired” to join the production? Does the total output increase or decrease and by how many products?
  6. Which inputs are constant during the activity?
  7. In your opinion, does this activity help you understand the law of diminishing marginal product of labor? Why or why not?

Shengnan Fang is Faculty, Business Management, at Linn-Benton Community College in Albany, Oregon.

Opinions expressed in Learning Abstracts are those of the author(s) and do not necessarily reflect those of the League for Innovation in the Community College.