If you're not familiar with Mad Libs, you might want to search on Wikipedia or something to get an idea of how they work. The idea is that you make a funny story by filling in words with other people.
To explain the concept, I do a short example with the JTE in front of the class. I ask them not to look at the blackboard, and write the following story so the students can read it:
I ask the JTE to tell me (A) a teacher at the school, (B) an adjective, and (C) a vegetable.
Hopefully that results in a humorous passage. Then I pass the story out to the students, but instruct them to fold it along the dotted line and only look at the bottom half. The students will ask their partners for words for entries A through H. You might need to help with some examples. Once their partner has given them all of the words, they can unfold the paper and write their new story. Usually the students get a big laugh out of this part, and if any are particularly good, you can ask the students to read them in groups or to the class.