IB Economics - Wyatt's Notes

sources:

• text: Standard textbook reference

Economics is the study of choices under scarcity — how individuals, firms, and governments allocate limited resources: Economic thinking reveals hidden trade-offs and incentives in every decision, from personal budgets to national policy

Why it matters: Economic literacy is essential for informed citizenship and navigating an increasingly complex world

The key insight: Economic thinking reveals hidden trade-offs and incentives in every decision, from personal budgets to national policy

• Supply and Demand — scarcity, PPF, supply and demand, consumer choice
• Elasticity — price, income, and cross-price elasticity of demand and supply
• Market Failure — externalities, public goods, information asymmetry, government intervention and failure
• Theory of the Firm — market structures, perfect and imperfect competition, oligopoly, monopoly, production theory

• National Income — GDP, GNP, GNI, national income accounting, GDP deflator, PPP
• Fiscal Policy — government spending, taxation, budget deficits, crowding out, fiscal rules
• Monetary Policy — interest rates, money supply, inflation, monetary transmission, quantitative easing
• Supply-Side Policy — aggregate demand and supply, supply-side policies, economic growth, business cycles, Laffer curve

• International Trade — comparative advantage, free trade, trade protection, economic integration, WTO, globalisation
• Exchange Rates — exchange rate systems, determination, floating and fixed rates
• Balance of Payments — BOP accounts, current account, capital account, FDI, multinational corporations

• Measuring Development — GDP, HDI, Gini coefficient, Lorenz curve, composite indicators
• Barriers to Growth — poverty trap, debt, institutional failure, Harrod-Domar, Lewis model, dual economy
• Trade and Aid — foreign aid, FDI, sustainable development, microfinance, technology leapfrogging, SDGs

• Descriptive Statistics — real vs nominal, compound interest, CBA, Lorenz curve, Gini, poverty, HDI, multiplier, IS-LM
• Index Numbers — index number construction, weighting, chaining, splicing, Laspeyres and Paasche indices

• Game Theory and Behavioural Economics — Nash equilibrium, prisoner”s dilemma, heuristics, biases, nudge theory, auctions

• Use real-world examples for every concept — examiners reward applied knowledge of current economic events and policies
• Practise drawing and labelling diagrams (supply/demand, AD/AS, Lorenz curve) as they carry significant marks in paper-based questions
• Learn the precise definitions of key terms; IB mark schemes often require exact terminology to earn full marks
• Review past paper questions by topic and compare your responses against the published mark schemes to understand the level of depth expected
• For the internal assessment, choose news articles early and focus on linking multiple economic concepts to the same article
• Create a glossary of definitions as you study; Paper 1 and Paper 2 both begin with short-definition questions that require precise wording

This section provides comprehensive Ib Economics content, covering all specification points with detailed explanations, worked examples, and practice questions.

Each page in this section includes:

• Definitions: Clear, precise explanations of key concepts
• Worked Examples: Step-by-step solutions with annotations
• Practice Questions: Examination-style questions with detailed solutions
• Common Pitfalls: Errors to avoid and how to fix them
• Exam Tips: Strategies for maximising marks

1. Read the introductory page to understand the topic overview
2. Work through each sub-topic in order
3. Attempt the practice questions before checking solutions
4. Use the flashcards to revise key terminology
5. Complete the diagnostic test to identify remaining gaps

• Core definitions and principles
• Application to examination-style questions
• Links to related topics across the specification
• Assessment objective alignment

• Active Recall: Test yourself regularly rather than re-reading notes
• Spaced Practice: Revisit this topic at increasing intervals
• Interleaving: Mix with other topics during revision sessions
• Elaboration: Explain concepts in your own words

Focus on command word interpretation and mark scheme analysis. Practice timing yourself on questions to build speed and accuracy. Review examiner reports for this topic to understand common student errors.

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