Exploring Diminishing Marginal Utility
Unit 1 · Lesson 1.5 · Last updated May 20, 2026
A 45-minute hands-on economics experiment using a gum-chewing simulation to teach the law of diminishing marginal utility, economic modeling, and the scientific method.
Overview
In this lesson, students participate in a simulated economic experiment to learn about the scientific method, how economists use it, and the law of diminishing marginal utility. Students act as economists to create and test a hypothesis by collecting data, then use that data to create an economic model. The lesson concludes with opportunities to recall the principles of economic thinking and apply them to novel scenarios in preparation for Lesson 1.6.
Learning Objectives
- Describe the law of diminishing marginal utility and explain the role it plays in decision making.
- Apply the principles of economic thinking to decision making.
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Materials
- Instruction Slides (display during class period)
- Student Handout pp. 4–5 (1 copy per student)
- Package of individually wrapped gum (at least 6 pieces)
Lesson Sequence
Slides 2–3
- Display Slide 2. Students generate their responses to the prompt on the slide. Encourage students to jot down their thoughts on paper to prepare for a class discussion. After approximately 4 minutes, direct students to share responses with a peer, then discuss as a class. Additional educator tips and suggested answers are in the notes section throughout Instruction Slides.
- Display Slide 3 and introduce the learning objectives for the lesson.
Slides 4–10
- Proceed to Slide 4. Tell students they will participate in an economic experiment — acting as economists to make a hypothesis, run an experiment, and gather data. A single student will serve as the "test subject."
- Display Slide 5. Select 1 student to be the test subject (a student who is a bit reserved but still willing to be in front of the class works best). Tell the test subject they will participate in an experiment involving chewing gum. Note: Do not provide additional information at this time. Click to reveal the text on Slide 5 and direct the test subject to step into the hall while the class generates their hypotheses — it would invalidate the experiment if the test subject knew what hypotheses were made.
- Proceed to Slide 6. With the test subject in the hall, distribute 1 copy of Student Handout to each student (place a copy at the test subject's seat for them to refer to after the experiment). Direct students to read the "Introduction" on Student Handout.
- Display Slide 7. Remind students that economists create a hypothesis prior to performing an experiment.
- Proceed to Slide 8. Direct students to write their hypotheses in the space provided on Student Handout. Students may discuss with a peer but do not need to share the same hypothesis.
- Advance to Slide 9. Remind students not to tell the test subject their hypothesis when they return. Bring the test subject back into the room.
- Display Slide 10. Click to reveal the experiment instructions and explain each step. Tell the class to record data in the "Marginal Utility" column on Student Handout as the test subject reports their utility with each additional piece of gum. Note: Tell students to leave the "Total Utility" column blank and ignore the graph for now. Pro Tip: Consider having 2 additional student volunteers assist — one as timekeeper and one as gum provider — freeing you to track experiment data using a document camera, smartboard, or whiteboard.
- Begin the experiment by giving the test subject 1 piece of gum. Continue until the test subject decides to stop or until no gum remains. Thank the test subject and have them return to their seat.
Slides 11–23
- Advance through Slides 11–12. Emphasize that the marginal utility recorded on Student Handout reflects the additional satisfaction the test subject gained with each additional piece of gum.
- Proceed to Slide 13. Lead students through the process of graphing the test subject's marginal utility curve using a document camera, smartboard, or whiteboard. Instruct students to add points to their graph on Student Handout. Note: Data points will vary but will show a general downward trend. Refer to Slide 14 (Example Graph) for reference — this slide is hidden in Slideshow mode. Click to reveal the pink textbox on Slide 13 and explain that students have created an economic model. Briefly describe the purpose of models in economics. Click to reveal the question and ask students to identify where marginal utility was highest and lowest on their model.
- Advance to Slide 15. Guide students through calculating total utility using data from Student Handout. Refer to Slide 16 (Example Table) for reference — this slide is hidden in Slideshow mode.
- Advance to Slide 17. Direct students to discuss the prompt on the slide.
- Display Slide 18. Debrief as a class. Remind students to add notes and drawings to Student Handout throughout the lesson.
- Proceed to Slide 19. Ask students to discuss the questions with a peer. Provide additional information about preferences, sample size, and utility as needed.
- Advance to Slide 20. Define diminishing marginal utility and ask students to consider how the experiment illustrated the concept. Note: Although the class sample size was small, these results have been borne out in experiments with larger, representative sample sizes.
- Display Slide 21. Ask students to discuss the prompts with a peer using the graph on Student Handout. Students may add notes to the "Debrief" section. Then debrief as a class.
- Progress through Slides 22–23. Place students into pairs (groups of 3 if needed) and direct them to turn to the "Economist as Life Coach" section of Student Handout. Tell students they will be responsible for 1 of the scenarios. Direct pairs to pick the scenario they are most interested in (or assign scenarios) and complete the instructions on the slide. Students may add notes to Student Handout to support further conversation in Lesson 1.6. Circulate to answer questions and clarify as needed.
Slides 24–26
- Proceed through Slides 24–25. Direct students to consider the question on the slide and share responses with a peer.
- Display Slide 26. Tell students that decision making in the real world is often more complicated than it has been framed in previous lessons, and that additional complexities of decision making will be the focus of Lesson 1.6. Instruct students to put Student Handout in their course notebook as they will need it again in Lesson 1.6.
Aligned Standards
Voluntary National Content Standards in Economics
Standard 2 Decision-Making
What Educators Are Saying
The students were engaged in the experiment.
High School Economics Teacher, Arizona
I loved the hands-on experiment which kept the whole class engaged.
High School Economics Teacher, North Carolina
They really liked this lesson. They got involved with it and the explanations/discussions were very productive.
High School Economics Teacher, Connecticut