Teaching the Art of Economic Modeling - Eric asks for volunteers to approach a flat map of the world. Giving them a piece of string, he asks them to find the shortest distance between their university and Tokyo Japan (there will be many laughs as they struggle to find Japan, so don't call on volunteers who you think are smart). Then, ask the students to perform the same activity on a realistic model of the world: a globe. As they find their more direct route they quickly see that it differs from the route selecting using the flat map. This illustrates the importance of using a good model for the problem at hand--in economics and everything. During the Great Depression people thought that whatever was good for a cartel was good for everyone. This is why they promoted price-fixing, plowed under acres of cotton, and killed baby pigs. This model of how the welfare of cartels affected the welfare of everyone proved to be a bad model - with terrible consequences.
Teaching the Three Stages of Production - Most introduction to economics professors have an activity they use to teach the three stages of production. I once had them build structures out of empty beer cans (guess where the empty cans came from!). Andrew Barkley has them build paper airplanes. My intro teacher had us build "products" where were five sheets of paper stapled together. In all cases, there is a fixed amount of capital (beer cans, paper, stapler) and a variable amount of labor. Start with one person, measure output, then do the same for two, three, ..., twenty people and plot how production changes with labor. Eric uses a method that might not be as fun as building a beer can structure, but I think illustrate the concept better. he draws a rectangle on the chalk board and has them write something like "Bailey Rocks" as many times as they can in a limited time period. The fixed capital is the area within the chalkboad and the time limitation, and the variable labor is the number of people drawing. You can imagine the fun and laughter as they get in each others way when the number of participants becomes large.