Wednesday, October 26, 2016

Diminishing Marginal Returns

Years ago I made a few YoutTube videos for class because I was running behind. I hope to continue to make more in the future. One of the videos I made was about supply, and within the video was the concept of diminishing marginal utility. This is a concept that is hard to make stick with the students, but could not be more important to understanding a number of other concepts within economics. With that said, I tried to develop a lesson that would stick with students and would be something that they would look forward to each year. I found such a lesson a few years back.

I heard of the milk challenge a number of years ago. For those who do not know, a very small percentage can drink a full gallon of milk in an hour. Most of the time it leads to getting sick. I thought that most students would think they could do it and so I set out to see if students were interested. It turns out they were and this lesson was born.

Here is my disclaimer: Only do this lesson if your teaching style, students, parents, and administrators fit to do so. I am in such a situation, but understand that not everyone is. Here is what I do:
1. They already know what marginal and utility mean so we review that.
2. I have 2 students bring a note from home stating that it is ok for their student to participate.
3. I buy, from my seat sell money, 2 dozen donuts. I used to use milk, but there was an incident in which a student got sick all over the bathroom floor, so I switched to donuts because students tend to stop faster.
4. I tell students that on a scale from one to ten that they need to keep track of their utility with every donut they eat. I tell them I need honesty in order for the numbers to give a true sense of their diminishing marginal utility.
5. I take the sheet, plug it into Excel, make a graph and we all see the downward trend of their utility.

This lesson sticks and every year students cannot wait for it. I get asked from day one when are we going to do this.

Again, be careful, but have fun!

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