For example, higher marginal tax rates may discourage high-income earners from working harder or longer if they feel that more of their income goes to the government. Economic models are simplifications of the real world. Economics is traditionally divided up into two branches microeconomics and macroeconomics. Diagrams highlight better. Evaluate Oxford's new DP Economics Course Book online now. Before we match you with one of our trusted tutors, we want to know a little bit about you so we can ensure the best possible support. Scarcity results in choices with opportunity costs, Markets provide incentives and ration scarce resources, Perfectly competitive markets are efficient, Market failure may require government intervention, The benefits of market activities may not be equitable, Government intervention may involve an equityefficiency trade-off, Interdependence results in flow-on effects, Economic indicators aid economic analysis, Inflation can distort economic indicators, Perfectly competitive markets (for private goods and services at equilibrium) are efficient, Government interventions for common causes of market failure. Among economists, the most commonly accepted set of ideas about how the economy works is called neoclassical economics. Economics A-Level Specification (All Exam Boards), Consumer & Producer Surplus Notes (A-Level, IB), Qurious Education | Admissions | Tutoring, The production possibilities curve model (PPC), Diagram: PPC illustrating choice and opportunity cost, unemployment of resources, actual growth and growth in production possibilities, Diagram: circular flow of income model, with leakages and injections, The law of demandrelationship between price and quantity demanded, Relationship between an individual consumers demand and market demand, Movements along the demand curve and shifts of the demand curve, Diagram: movements along the demand curve and shifts of the demand curve, The law of supplyrelationship between price and quantity supplied, Relationship between an individual producers supply and market supply, Movements along and shifts of the supply curve, Diagram: movements along and shifts of the supply curve, Demand and supply curves forming a market equilibrium, Shifting the demand and supply curves to produce a new market equilibrium, with reference to excess demand (shortage) and excess supply (surplus), Diagram: showing changes in equilibrium/ role of price mechanism, Diagram: showing consumer surplus and producer surplus (social/ community surplus) maximized at competitive market equilibrium. Other governments recognise that reducing poverty will improve economic efficiency. Also, they don't count in the word count either! You will have to focus more on developing content and analysing your chosen article. into outputs. In this book, we aim to provide you with the essential theory included in the syllabus. 4. STUDENT AND . Finding the news article for your commentary is the first most important step. IB Economics focuses heavily on application. Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs. Make the most out of your teachers comments. The economic world is in a continual state of flux and economists must be aware of this and adapt their thinking accordingly. Benefits of international trade, including: Diagram: free trade illustrating exports when world price is above domestic price, Diagram: showing the effect of a tariff on price, production, consumption, expenditures, revenues, welfare, Diagram: showing the effect of a quota on price, production, consumption, expenditures, revenues, welfare, Diagram: showing the effect of a subsidy on price, production, consumption, expenditures, revenues, welfare. Implications of a persistent current account surplus in terms of (HL only): Relationship between sustainability and poverty (HL only). The market mechanism may result in socially undesirable outcomes that do not achieve efficiency, environmental sustainability and/or equity. In our example, it seems like the government is trying to reduce the consumption of alcohol, so instead of banning it completely, they should like to tax it more. In this particular example, you can talk about a similar scenario in Pakistan. Sustainability is a key concept for IB Economics students. 5.1 Price Elasticity of Demand and Price Elasticity of Supply. IB Key Concepts. For help on how to appropriately use economic terms, refer to the IB Economics guide. The focus of this paper has now slightly shifted, and may prove to be slightly more difficult (as evidenced by Paper 3 now being worth 10% more!). An economist would recommend the use of scarce resources to satisfy wants only when the extra benefit gained from using the scarce resources exceeds the extra cost associated with using them. Improved economic efficiency also gives a government the opportunity to can spend more on developing infrastructure to improve productivity. If resources are fully employed, then more can be produced. Macro-economics is the branch of economics that examines the workings and problems of the economy as a whole. 3 Things to Know About IB Economics Changes. The amount they are paid is the marginal benefit. Conceptual understandings: You will be asked to answer 2 compulsory questions. Welfare is maximized if allocative efficiency is achieved. Y12 students (or new IBDP students) in 2020 will be studying this new syllabus instead of the old one. newsletters and promotional offers. You want to make terms likeexternalities, quota, trade barriers, foreign investment, etc, a part of your daily vocabulary. This blog acts as an IB Economics Internal Assessment Guide which will help you rank up your performance in IB Economics. It will need to: -Indicate the exact prices and quantities (or percentage changes in price or quantity if they are included in the article. the extra revenue gained by producers (Marginal costs) Consumer. The [], Your email address will not be published. Soaring food and fuel . Resource overuse, resulting in challenges to environmental sustainability. Show as much as you can in your diagrams. Examples of relevant diagrams include the following: explaining the effects on the stakeholders; stating the relationship between the economic factors and theproducts; And of course, explaining your diagrams is the major task here. It is considered best practice to keep reading the newspaper right from the beginning of your course. Countries trading products and services they are comparatively better at producing will be able to sell them overseas for a higher price than they sell them locally. Listening to other people's ideas also enriches your intellect. Math solutions -. But when discussing systems thinking with interested others I often find that it is such a huge concept. Economics is an exciting, dynamic subject that allows students to develop an understanding of the complexities and interdependence of economic activities in a rapidly changing world. Start off by explaining the case of your article and what is going to be analysed in the essay. D: Key concept (3 marks) IB Explanation: This criterion assesses the extent to which the student can explain and develop appropriate economic theories and/or concepts in the context of the article. While these key concepts aren't explicitly assessed on the external assessment, the IA requires the students in their commentary to connect the article towards a key concept. legislation, you have rights in relation to your data. Syllabus key concepts: scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence, intervention. Conceptual understandings: Changes in demand and supply for a currencyfactors including: Calculation: changes in the value of a currency from a set of data. The new IB Economics syllabus and curriculum for 2020 is listed below, for first assessment in 2022. If a government believes the gap between rich and poor is too great, it will redistribute wealth by giving benefits to the poor, for example, unemployment benefits, and taxing the rich at higher rates. Every country whether rich or poor has to make choices and is confronted with the key economic problem of scarcity. For example, market equilibrium occurs at the price where the quantities demanded by consumers equals the quantity supplied by producers, meaning that just the right amount of resources are used, since there are neither shortages nor surpluses. consumer rationality / biases), and newer Monetary Policy Tools (e.g. Economies of Scale, LRAC Curve Notes & Questions (A-Level, IB Economics), Public Goods, Free-Rider Problem Notes & Questions (A-Level, IB Economics). consumer wants are satified. Production is the process a firm uses to transform inputs (e.g. Your email address will not be published. HL Paper 3 Exam questions All with model, exemplar answers! They are: Overall, the Economics IA helps students to choose an economic article of their interest, and analyze the consequences and potential problems through the use of theories learnt in class. Consequences of changes in the exchange rate on economic indicators, such as: Diagram: AD/AS curves to show potential consequences of changes in the exchange rate on the economy, Diagram: showing how a fixed exchange rate is maintained, Diagram: showing the exchange rate determination and changes in equilibrium in a managed exchange rate system, Calculation: elements of the balance of payments from a set of data, The multidimensional nature of economic development, Strengths and limitations of approaches to measuring economic development, Possible relationship between economic growth and economic development, Diagram: a poverty cycle showing any linked combination of factors that perpetuate poverty, Significance of different barriers to economic growth and/or economic development, Strategies to promote economic growth and/or economic development, Diagrams: in this section students are expected to draw from the diagrams used in the other sections, 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, Progress toward meeting selected Sustainable Development Goals in the context of two or more countries. Market failure occurs when free markets fail to allocate resources efficiently. 45 teaching hours for SL, 65 hours for HL where you'll study the benefits of international trade, protectionism, exchange rates . Conceptual understandings: Supply side policies are designed to influence production directly. Individual and collective motivations and behaviours are complex and diverse, and their understanding entails the interaction of a variety of disciplines such as philosophy, politics, history, and psychology. You are going to submit three Economics commentaries by the end of your IB diploma/certificate. If youre studying SL Economics, your IA commentaries are now worth 30% of your overall grade. Adam Smith (widely cited as the father of modern economics) argued that if consumers are allowed to freely choose what to buy and if producers choose freely what to sell and how to produce it, a free market will, as if led by an invisible hand, settle on products and prices that make both consumers and producers both better off. Required fields are marked *. Economists have developed a variety of models to aid analysis of both macroeconomic and microeconomic issues. Paper 1 is also worth 30%, while your Paper 2 is worth 40%. Overview: Global Politics HL Presentations, Economics Paper 1 & 2 revision strategies. Don't shy away from joining various social groups where people chat about these topics. Economic well-being is a multidimensional concept relating to the level of prosperity and quality of living standards enjoyed by members of an economy. When the smoker pays only the price at which the producer sells the cigarettes, they are not paying for the cost of these negative impacts. It is also important to be aware that the questions in the 3 Economics papers can be from any unit in the syllabus below. Macroeconomics: the branch of economics that studies the working of the economy as whole, Key Concepts Of The New Pattern Every change that occurs is based on some underlying foundations, ideas, concepts, and motive. Market Efficiency. You can even include hand diagrams on paper though they are not recommended. For example, as world demand for dairy products rises, New Zealand farmers are switching to dairying. the central themes of economics are no longer included in the syllabus. So, the Paper 3 has become more important, while the Paper 1 has become slightly less! Your analysis on the article will have to explain a few factors, including: The impacts on the stakeholders of the policies stated in the article; Remember you are not trying to just rephrase and write another article. Government intervention attempts to achieve macroeconomic objectives through a choice of policies. Though we just went through every possible thing required, for a better idea, you can go through the criteria below to evaluate your own work: Make sure to come back to this IB Economics Internal Assessment Guide as often as you can to make sure you don't miss out on these easy points. This will surely help you as terminology is a part of your criteria. Macroeconomic policy suggestions therefore tend to focus on the balance of aggregate demand and aggregate supply. Values affect the importance (or weighting) people give to the different factors they consider in making a choice. For example, reducing poverty tends to reduce levels of illness, which are linked to poor housing and nutrition. If youre studying SL Economics, your IA commentaries are now worth 30% of your overall grade. You are going to submit three Economics commentaries by the end of your IB diploma/certificate. Here is a list of the main take-aways from this IB Economics Internal Assessment Guide: The one intangible point missing from this IB Economics Internal Assessment guide is that you need to have the right mindset to score well in IB Economics Internal Assessments. 1678+ Video tutorials, 1227+ PDF IB Resources, 195+ Sample IAs, 148+ EEs, 8777+ Sample questions, 653+ quizzes, IB Note that you only need to define the, Start off by explaining the case of your article and what is going to be analysed in the essay. Key concepts can function like related . All rights reserved. Markets are places or situations where producers and consumers exchange goods and services. Websites like Google News can help you find an article that suits your interests (like duh!). The following are key concepts/big ideas in economics: Scarcity results in choices with opportunity costs. Consumer and producer choices are the outcome of complex decision-making. Choosing the article and the key concept to focus on completely depends on the students interest. Get for free what others have paid $100s in tuition The syllabus includes sustainable development, sustainable developmental goals, and the relation between sustainability and poverty, etc. Now that you know what your Economics IA is all about and how it is evaluated by the IB, you are ready to start with your Economics IA commentary. Longer notes: Elasticities. How much the student values their time not working (the opportunity cost) represents the marginal cost. These are scarcity, choices, efficiency, equity, economic well-being, sustainability, change, interdependence, and intervention. If not, label them Q1, Q2, P1, P2, etc. Also, relevance is the most important thing to keep in your mind when drawing the diagrams. The key concepts are: Scarcity Choice Efficiency Equity Economic Well-Being Sustainability Change Interdependence Intervention Each article chosen must be published no more than one year before the writing of the commentary. Strengths and limitations of government policies to correct externalities and approaches to managing common pool resources including: Government intervention in response to public goods, National income accounting as a measure of economic activity, Diagram: circular flow of income model showing the interactions between decision makers, leakages and injections, Equivalence of the income, output and expenditure approaches to national income accounting, with reference to the circular flow model, [Nominal] Gross domestic product (GDP) as a measure of national output, Calculation: [nominal] GDP from sets of national income data, using the expenditure approach, [Nominal] Gross national income (GNI) as a measure of national output, Calculation: real GDP and real GNI, using a price deflator, Calculation: real GDP per capita and real GNI per capita, Business cycle: short-term fluctuations and long-term growth trend (potential output), Diagram: business cycle showing short-term fluctuations and long-term growth trend (potential output). For example, when overseas countries that trade with New Zealand go into recession and reduce their spending, the flow-on effect for New Zealand is fewer export receipts and lower levels of economic growth. This colorful poster set features the 7 IB PYP Key Concepts. Note: first assessment 2022; latest economics guide. Economists use increases in real income to identify economic growth increasing real income shows that a country, with its resources, is now able to satisfy more wants and needs. There are comprehensive IB Economics student activities and exam practice questions which target all exams: Paper 1, Paper 2 and the Higher Level Paper 3. By siging up, I agree to Lanternas Change is constantly happening, whether it be in consumer tastes, fashion, technology, culture, globalization, the external economic and social environments and the competition. Finally, in terms of assessment, IB HL Economics students are now required to answer policy recommendation questions in Paper 3, and SL Economics students need to answer some quantitative questions in Paper 2. Take the chance to analyze the effectiveness of different economic decisions that interest you! while your Paper 1 has decreased in value slightly! We compute it as the percentage change in quantity demanded (or supplied) divided by the percentage change in price. If you continue to use this site we will assume that you are happy with it. Change An understanding of the concept of change is essential in economics. Quick reference: Price elasticity of demand (PED) opening the floodgates to that sweet 45! Do not rephrase the sentences from your article. An incentive is something that motivates a producer or consumer to follow a particular course of action or to change it. Thus, in the short run the only way to change output is to change the variable inputs (e.g. Diagram: monopolistically competitive firm showing: Advantages of large firms having significant market power, including: Risks in markets dominated by one or a few very large firms, Government intervention in response to abuse of significant market power, Workings of free market economy may result in an unequal distribution of income and wealth, Diagram: showing the circular flow model to illustrate why the free market results in inequalities, Calculation (HL only): a weighted price index, using a set of data provided, Sustainable level of government (national) debt (HL only), Trade-off between unemployment and inflation (HL only), Construction (HL only): a Lorenz curve from income quintile data, Calculation (HL only): given the indirect tax rate, the amount of indirect tax paid from a given level/ amount of expenditure, The process of money creation by commercial banks (HL only), Demand and supply of moneydetermination of equilibrium interest rates (HL only), Diagram (HL only): showing the determination of equilibrium interest rates, Calculation (HL only): Keynesian multiplier, Diagram (HL only): showing the crowding-out effect, Automatic stabilizers: progressive taxes, unemployment benefits (HL only), Calculation (HL only): from a diagram, the quantity of exports, quantity of imports, import expenditure, export revenue, Absolute and comparative advantage (HL only), Diagram (HL only): linear PPC showing differing opportunity costs and the potential gains from specialization and trade as a result of comparative advantage, Limitations of the theory of comparative advantage (HL only), Calculation (HL only): from a diagram, the effects on stakeholders of tariffs, Calculation (HL only): from a diagram, the effects on stakeholders of quotas, Calculation (HL only): from a diagram, the effects on stakeholders of subsidies, Advantages and disadvantages of monetary union (HL only), Fixed versus floating exchange rate systems (HL only), Relationship between the current account and the exchange rate (HL only), Diagram (HL only): on exchange rate showing the relationship between the current account balance and the exchange rate, Relationship between the financial account and the exchange rate (HL only), Implications of a persistent current account deficit in terms of: (HL only), Methods to correct a persistent current account deficit (HL only). 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