"Story Arc" is a drama activity might be hit or miss with audiences, but I've found it invaluable during workshops, especially for performers that are new to improv scenes that run longer than five minutes.
Here's how to play: One person is chosen to be the Protagonist. Everyone else in the scene will play a variety of supporting characters. A moderator guides the events of the story. He or she asks the audience for a suggestion: perhaps a location, a genre, or the title of a movie that doesn't exist.
The moderator announces: "Beginning" or "Introduce the Characters" to signify the start of the scene. At this time, the Protagonist character begins to interact with her environment and her supporting characters. The mood of the piece should be established, but no story line or plot twists should be developed yet.