IB DP Economics Revision Resources- Practice Questions and Notes
IB DP Economics Revision Resources- Practice Questions and Notes
IB DP Economics Revision Resources- Practice Questions and Notes: Prepare for the IB exams with subject-specific practice questions, model answers, and comprehensive revision notes. All topics covered.
IB Economics Revision Resources: Prepare effectively for your exams with a wealth of practice questions covering all core and option topics. Access detailed notes, exam tips, and study guides to maximize your score.
Exam Style Practice Questions, Notes and Past Paper for IBDP Economy
IB DP Economic Study Notes
Unit 1: Introduction to Economics
- Topic 1.1: What is Economics?
- Topic 1.2: How do economists approach the world?
Unit 2: Microeconomics
- Topic 2.1: Demand
- Topic 2.2: Supply
- Topic 2.3: Competitive Market Equilibrium
- Topic 2.4: Critique of Maximizing Behaviour
- Topic 2.5: Elasticity of Demand
- Concept of elasticity
- Price elasticity of demand (PED)
- Determinants of PED & Relationship between PED and total revenue
- Importance of PED (firms and government)
- Lower PED: primary vs manufactured goods (HL only)
- Changing PED along a straight-line demand curve (HL only)
- Income elasticity of demand (YED)
- Importance of YED (HL only)
- Topic 2.6: Elasticity of Supply
- Topic 2.7: Government Intervention
- Reasons for government intervention in markets
- Main forms of government intervention in markets
- Consumer nudges (HL only)
- Effects on stakeholders
- Topic 2.8: Market Failure – Externalities & Common Resources
- Marginal social benefit (MSB) equals marginal social cost (MSC).
- Government intervention in response to externalities and common pool resources
- Strengths and limitations of government policies to correct externalities
- Importance of international cooperation
- Topic 2.9: Market Failure – Public Goods
- Public goods
- Government intervention in response to public goods
- Topic 2.10: Market Failure – Asymmetric Information (HL only)
- Asymmetric information
- Responses to asymmetric information
- Topic 2.11: Market Failure – Market Power (HL only)
- Perfect competition (many firms, free entry, homogeneous products)
- Monopoly (single/dominant firm, high barriers, no close substitutes)
- Imperfect competition (oligopoly and monopolistic competition)
- Rational producer behaviour (profit maximization) (HL only)
- Degrees of market power
- Monopoly (profit maximization, allocative inefficiency, welfare loss, natural monopoly)
- Oligopoly (collusion, interdependence, price war, concentration ratios)
- Monopolistic competition (short-run & long-run profit, product variety, inefficiency)
- Advantages of large firms (economies of scale, innovation)
- Risks of market dominance (higher prices, reduced output, less choice)
- Government intervention (regulation, ownership, fines)
- Topic 2.12: Market Failure – Equity (HL only)
The market’s inability to achieve equity
Unit 3: Macroeconomics
- Topic 3.1: Measuring economic activities
- National income accounting as a measure of economic activity
- Income, output and expenditure approaches to national income accounting
- Nominal GDP as a measure of national output
- Nominal GNI as a measure of national output
- Real GDP and GNI
- Real GDP/GNI per person (per capita)
- Business cycle
- Appropriateness of using GDP or GNI statistics
- Alternative measures of well-being
- Topic 3.2: Variations in economic activity – aggregate demand and aggregate supply
- Aggregate demand (AD)
- Components of AD (consumption)
- Determinants of AD components
- Shifts of the AD curve caused by changes in determinants
- Short-run aggregate supply (SRAS) curve
- Shifts of the SRAS curve
- Alternative views of aggregate supply (AS)
- Shifts of the AS curve over the long-run
- Macroeconomic equilibrium
- Assumptions and implications of the monetarist/new classical and Keynesian models
- Topic 3.3: Macroeconomic objectives
- Economic growth
- Consequences of economic growth
- Low unemployment
- Low and stable rate of inflation
- Relative costs of unemployment versus inflation
- Sustainable level of government (national) debt (HL only)
- Potential conflict between macroeconomic objectives
- High economic growth
- Topic 3.4: Economics of inequality and poverty
- Relationship between equality and equity
- The meaning of economic inequality
- Measuring economic inequality
- Meaning of poverty
- Measuring poverty
- Difficulties in measuring poverty
- Causes of economic inequality and poverty
- Impact of income and wealth inequality
- Role of taxation in reducing poverty, income and wealth inequalities
- Further policies to reduce poverty, income and wealth inequality
- Topic 3.5: Demand management – monetary policy
- Monetary policy
- Goals of monetary policy
- The process of money creation by commercial banks (HL only)
- Tools of monetary policy (HL only)
- Demand and supply of money (HL only)
- Real versus nominal interest rates
- Expansionary and contractionary monetary policies to close deflationary/recessionary and inflationary gaps
- Effectiveness of monetary policy
- Topic 3.6: Demand management – fiscal policy
- Fiscal policy
- Goals of fiscal policy
- Expansionary and contractionary fiscal policies in order to close deflationary/recessionary and inflationary gaps
- Keynesian multiplier (HL only)
- Effectiveness of fiscal policy
- Strengths of fiscal policy
- Topic 3.7: Supply-side policies
- Goals of supply-side policies
- Market-based policies
- Interventionist policies
- Demand-side effects of supply-side policies
- Supply-side effects of fiscal policies
- Effectiveness of supply-side policies
Unit 4: The Global Economy
- Topic 4.1: Benefits of International Trade
- Benefits of International Trade
- Absolute and Comparative Advantage (HL)
- Limitations of the Theory of Comparative Advantage (HL)
- Topic 4.2: Types of Trade Protection
- Tariffs
- Quota
- Subsidy/export subsidy
- Administrative Barriers
- Topic 4.3: Arguments For and Against Trade Protection
- Arguments For Trade Protection
- Arguments Against Trade Protection
- Free Trade Versus Trade Protection
- Topic 4.4: Economic Integration
- Preferential Trade Agreements
- Trading Blocks
- Advantages and disadvantages of trading blocks
- Monetary union
- The World Trade Organization (WTO)
- Topic 4.5: Exchange Rates
- Floating Exchange Rates
- Changes in Demand and Supply of a Currency
- Consequences of Changes to the Exchange Rate
- Fixed Exchange Rates
- Managed Exchange Rates
- Fixed Versus Floating Exchange Rate Systems (HL)
- Topic 4.6: Balance of Payments
- Balance of payments
- Components of the balance of payments
- Interdependence between the accounts
- Relationship between the current account and the exchange rate (HL)
- Relationship between the financial account and the exchange rate (HL only)
- Implications of a persistent current account deficit (HL only)
- Methods to correct a persistent current account deficit (HL only)
- The Marshall-Lerner condition and the J-curve effect (HL only)
- Implications of a persistent current account surplus (HL only)
- Topic 4.7: Sustainable Development
- The meaning of sustainable development
- Sustainable Development Goals
- Relationship between sustainability and poverty (HL only)
- Topic 4.8: Measuring Development
- The multidimensional nature of economic development
- Single indicators
- Composite indicators
- Strengths and limitations of approaches to measuring economic development
- Possible relationship between economic growth and economic development
- Topic 4.9: Barriers to Economic Growth and Economic Development
- Poverty Traps and Poverty Cycles
- Economic Barriers
- Political and social barriers
- Significance of different barriers to economic growth and/or economic development
- Topic 4.10: Economic Growth and Economic Development Strategies
- Strategies to Promote Economic Growth and Economic Development
- Strengths and Limitations of Strategies for Promoting Economic Growth and Economic Development
- Strengths and Limitations of Government Intervention Versus Market-Oriented Approaches to Achieving Economic Growth and Economic Development
- Meeting the Sustainable Development Goals
