A Production Possibilities Frontier Experiment: Links and Smiles

David A. Anderson and James Chasey

Production and Firm Behavior

Non-computerized experiment

In the teaching of college and advanced placement economics, some of the characteristics of the production possibility frontier (PPF) are as difficult to convey as they are important to understand. John Neral and Margaret Ray (1995) suggest a useful and instructive classroom experiment in which two products, "widgets" and "whajamas," are produced to study tradeoffs between outputs. Tearing a piece of paper in half, folding it twice, and stapling it creates a widget; folding the paper three times makes a whajama. We have designed the links and smiles experiment to incorporate one of the most challenging concepts to grasp in relation to the PPF--the specialization of inputs. Of course, it is this crucial factor that results in the increasing opportunity cost of production and the concave shape of the production frontier.