Widgets, Whajamas, and Scarcity

Neral, John and Margaret Ray. "Teaching Tools Experiential Learning in the Undergraduate Classroom: Two Exercises." Economic Inquiry. 33 (1995) 170-174.

This exercise demonstrates the basic economic concept of scarcity to students. The students participate in the production exercise above; however, this time the resources (i.e., capital and labor) are fixed and have to be allocated between the production of two goods, widgets and whajamas. A widget is produced by tearing a sheet of paper in half, folding it twice, and stapling it. A whajama is produced by folding a sheet of paper three times. Five students are asked to volunteer labor in 45 second production blocks. For the first production block, all available resources are dedicated to the production of widgets. For the second production block, all available resources are dedicated to the production of whajamas. For the remaining production blocks, the resources are allocated in various ways between widgets and whajamas. Data collected from the exercise can be used to determine production possibilities and opportunity costs, and discussion may ensue about technological improvement (i.e., adding scissors to widget production).