Sometimes it seems like an exercise in futility to try to teach the writing of dialogue. A teacher may be tempted to give in to the idea that you are either born with the ability to write good dialogue or not. That may be partially true, but practice always improves even if doesn't make perfect.
Lessons on dialogue should focus on something worth talking about. The first step in this assignment for the instructor is coming up with an opinion question that has two clearly defined, but opposing viewpoints. It could be a hot button political issue or something as mundane as a debate over which actor has been the best James Bond. Present the topic of debate to the students and then have them write a dialogue between characters who are having a debate over the contentious issue. Each side of the debate must be positively engaged and neither side can reduce to simple name calling.
Round Robin Writing
One of my favorite lessons on dialogue is round robin writing. The class divides into numbered groups of three. Each group represents one of two different people engaged in a dialogue. The odd numbered groups will be one person, and the even numbered groups will be the other person.
Starting with group one, the first person in the group says one word, followed by the next person in the group saying a word and the next saying a word and then back to the first person in the group and so on until the group has completed a sentence that makes sense that contains at least three words. The second group then responds to this sentence with a sentence of their own that replies to the first sentence. Naturally, their sentence is composed in the exact same way with each person coming up with one word.
This continues with each group coming up with a sentence until the scene ends, provided that each group has had at least one chance to come up with a sentence. This exercise will be taped and then transcribed. The students will then incorporate this dialogue into their own original short story.
The Melting Pot
Write a scene in which two characters from different parts of the country—or different countries altogether—are having a conversation. Be sure to include slang, varying speech patterns and rhythms, dialect or accents, the differences between references to common objects (such as "soda" and "pop" to describe soft drinks), but don't tell exactly where the characters are from. Give your scene to a fellow student and see if he can guess where your characters are supposed to be from.
Pick your favorite movie. Now rewrite a scene from that movie in which you provide the characters with completely different backgrounds. For instance, you might choose the The Dark Knight. Instead of Bruce Wayne being a millionaire heir from Gotham City, what if he was a self-made millionaire California surfer dude? And what if the Joker was a German neo-Nazi skinhead? That would make for quite a different movie, wouldn't it? Choose a scene from the movie and rewrite it using your new characterization choices.