IB Economics Cram Sheet

Every DP syllabus topic we have notes for, with the definition the papers mark and the graph that belongs to it. Print this the week of the exam.

Unit 1: Introduction to economics

1.1 What is economics?: Economics studies how people, firms and governments choose under scarcity: resources are limited, wants are unlimited, so every choice has an opportunity cost. Draw and shift a PPC
1.2 How economists approach the world:: Economists build simplified models resting on assumptions like ceteris paribus, test them against evidence, and revise them when data refutes the prediction.
1.1-4.10 IB Economics: The 9 Key Concepts, With Examples: The 9 key concepts in IB Economics are scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence and intervention.

Unit 2: Microeconomics

2.1 Demand:: Demand is the quantity of a good consumers are willing and able to buy at each price in a period; quantity demanded falls as price rises. Interactive supply and demand diagram
2.2 Supply:: Supply is the quantity of a good producers are willing and able to sell at each price in a period; quantity supplied rises as price rises. Interactive supply and demand diagram
2.3 Competitive Market Equilibrium:: Market equilibrium is the price where quantity demanded equals quantity supplied, so there is no shortage or surplus and the price mechanism clears the market. Interactive supply and demand diagram
2.4 Critique of Maximising Behaviour:HL: Behavioural economics shows consumers and firms are not perfectly rational maximisers: bounds on rationality, biases, and non-profit goals shape real choices.
2.5 Elasticity of Demand (PED and YED):: Elasticity of demand measures how responsive quantity demanded is to a change in price (PED) or income (YED), as a percentage change ratio.
2.6 Price Elasticity of Supply (PES):: Price elasticity of supply (PES) measures how responsive quantity supplied is to a change in price: %ΔQs divided by %ΔP.
2.7 Government Intervention in Markets:: Governments intervene in markets using price controls, indirect taxes, subsidies, direct provision, and regulation to change prices, quantities, and welfare. Model a tax on the supply and demand diagram
2.8 Externalities and Market Failure:: Externalities are spillover costs or benefits to third parties that markets ignore, causing over or underproduction and a welfare loss from the social optimum. Explore the externality diagram with MSB and MSC
2.9 Public Goods and the Free Rider Problem:: Public goods are non-rivalrous and non-excludable, so markets fail to provide them because of the free rider problem, and governments usually provide them.
2.10 Asymmetric Information:HL: Asymmetric information is when one party in a transaction knows more than the other, causing market failure through adverse selection and moral hazard.
2.11 Market Power and Market Structures:HL: Market power is a firm's ability to raise price above marginal cost, and it grows as market structure moves from perfect competition toward monopoly. Explore the monopoly diagram
2.12 Equity in Income Distribution:HL: Equity is fairness in how income is shared, which differs from equality; economists measure inequality with the Lorenz curve and the Gini coefficient.

Unit 3: Macroeconomics

3.1 Measuring Economic Activity:: National income accounting measures a country's output: GDP counts output produced inside its borders, while GNI adds net income earned abroad.
3.2 Variations in Economic Activity: AD and AS, IB 3.2 notes: The business cycle traces short-run swings in real GDP around its trend, while AD and AS diagrams show how spending and production set equilibrium output.
3.3 Macroeconomic Objectives: growth, jobs and inflation, IB 3.3: Governments pursue economic growth, low unemployment, and low stable inflation; these objectives often conflict, forcing policy trade-offs.
3.4 Inequality and Poverty:: Poverty is the inability to meet basic needs (absolute) or a society's normal living standard (relative); inequality is the uneven spread of income and wealth.
3.5 Monetary Policy:: Central bank use of interest rates and the money supply to steer aggregate demand toward an inflation target and stable growth. Money market: interest rate determination
3.6 Fiscal Policy:: Government use of spending and taxation to influence aggregate demand, close output gaps, and pursue growth, low inflation, and full employment. AD-AS: fiscal policy shifting AD
3.7 Supply-Side Policies:: Policies that raise productive capacity and shift LRAS right, split into market-based (freeing markets) and interventionist (government investment). AD-AS: LRAS shift from supply-side policy

Unit 4: The global economy

4.1 Benefits of International Trade:: Trade lets countries specialise where their opportunity cost is lowest (comparative advantage), raising total output and consumption above self-sufficiency. Interactive international trade diagram
4.2 Types of Trade Protection:: Tariffs, quotas, producer subsidies and administrative barriers all restrict imports and shift welfare between consumers, domestic producers and the government. Interactive international trade diagram
4.3 Arguments For and Against Trade Control:: Protection is argued on infant-industry, security, anti-dumping and jobs grounds, but free-trade theory shows most controls cost consumers more than they gain.
4.4 Economic Integration:: Economic integration deepens in stages: preferential deals, free trade areas, customs unions, common markets, then monetary union with a shared currency.
4.5 Exchange Rates:: An exchange rate is one currency's price in another, set by supply and demand when floating, or pegged by a central bank when fixed or managed. Interactive currency market diagram
4.6 Balance of Payments:: The balance of payments records all transactions between a country and the world across the current, capital and financial accounts, and always sums to zero.
4.7 Sustainability and the SDGs:: Sustainable development meets present needs without harming future generations' ability to meet theirs, balancing growth, equity and the environment.
4.8 Measuring Development: HDI and GDP per capita, IB 4.8: Development is measured with single indicators like GNI per capita at PPP, health and education, and composite indexes like the HDI that combine them.
4.9 Barriers to Development and the Poverty Cycle: IB 4.9: Barriers to development include poverty traps, weak institutions, commodity dependence, capital flight, debt, corruption, conflict and gender inequality.
4.10 Strategies to Promote Development: trade, aid, FDI (IB 4.10): Development strategies span trade policy, FDI, aid, debt relief, microfinance, remittances and institutional reform, each suited to different contexts. Gains from trade (export-led growth)

Exams and assessment

course structure IB Economics HL vs SL: differences, weightings, how to choose: HL and SL share the same four units; HL adds micro subtopics 2.4, 2.10, 2.11 and 2.12, more quantitative depth, and a Paper 3 policy exam.
Assessment Paper 1: how to structure: IB Economics Paper 1 is the 1h15 extended-response paper: part (a) explains for 10 marks, part (b) evaluates for 15. Worth 30% at SL, 20% at HL. Practise AD-AS in the graph sandbox
Assessment Paper 2: the: IB Economics Paper 2 is the 1h45 data-response paper: one question climbing a define, calculate, diagram, explain and 15-mark evaluate ladder. SL 40%, HL 30%. Practise supply and demand in the sandbox
Assessment Paper 3: the HL-onlyHL: IB Economics Paper 3 is the HL-only 1h45 policy paper: two compulsory data questions of calculations ending in a 10-mark policy recommendation. Worth 30% of HL. Practise trade and tariffs in the sandbox
Assessment Internal assessment: the: The IB Economics IA is three 800-word commentaries, each on a different syllabus section, using a different key concept and a recent news article. Draw a diagram in the sandbox

Full syllabus map: IB Economics. The papers still want diagrams you can shift: supply and demand and AD-AS.