OVERVIEW

What is IB Economics?

IB Economics combines microeconomic and macroeconomic theory with global real-world application, developing students' ability to analyse markets, evaluate government policies, and understand how international economics shapes the world. The course is assessed through a combination of written papers and an Internal Assessment portfolio of three economic commentaries. Higher Level Economics adds further depth in microeconomic theory — market structures, theory of the firm, and market failure — alongside additional macroeconomic content. IB Economics is highly regarded by universities for PPE, Economics, Finance, and International Relations degree programmes. At Improve ME, our IB Economics tutors build the diagram mastery, chain-of-reasoning skills, and IA commentary technique that distinguish 6 and 7 candidates from the rest of the field.

IB

Qualification

Ages 16-18

Age range

SL & HL

Exam boards

COURSE CONTENT

IB Economics Course Content

SL & HL coverage plus Internal Assessment (IA) support and exam strategy.

Microeconomics

Competitive markets — demand and supply, market equilibrium, price mechanism, shifts in demand and supply, consumer and producer surplus, allocative efficiency
Elasticity — price elasticity of demand (calculation, determinants, total revenue), price elasticity of supply, income elasticity, cross elasticity — applications and implications
Government intervention — indirect taxes, subsidies, price ceilings and floors — impact on welfare, consumer and producer surplus, deadweight loss
Market failure — public goods (non-excludable and non-rival), merit and demerit goods, positive and negative externalities, common pool resources, asymmetric information
Theory of the firm (HL) — short run and long run production, costs (fixed, variable, average, marginal), economies and diseconomies of scale, profit maximisation (MR = MC)
Market structures (HL) — perfect competition, monopolistic competition, oligopoly (kinked demand curve, game theory, collusion), monopoly — diagrams, efficiency, and evaluation
Labour markets (HL) — demand for labour, wage determination, monopsony, minimum wage, trade unions, discrimination

Macroeconomics

Measuring national income — GDP calculation methods (expenditure, income, output), GNI, purchasing power parity, limitations of GDP as a welfare measure, HDI and alternative measures
Aggregate demand and supply — AD components and determinants, SRAS and LRAS, output gaps, economic cycle, demand and supply-side shocks
Macroeconomic objectives — economic growth (actual and potential), low inflation (CPI measurement, demand-pull and cost-push causes), low unemployment (types and natural rate), balance of payments equilibrium
Fiscal policy — government expenditure and taxation, budget positions, multiplier effect, automatic stabilisers, supply-side fiscal policy — advantages and limitations
Monetary policy — interest rates and money supply, central bank independence, quantitative easing, inflation targeting — transmission mechanisms and limitations
Supply-side policies — labour market reforms, privatisation, deregulation, education and training investment — evaluation of effectiveness
International trade — comparative advantage, terms of trade, free trade arguments, protectionism (tariffs, quotas, subsidies) — costs and benefits, WTO, trading blocs

IA Commentaries and Global Economy

Internal Assessment portfolio — three commentaries on different sections of the syllabus, each based on a different published news article; maximum 800 words per commentary
Commentary structure — introduction with theoretical context, diagram, analysis of the article using economic theory, evaluation of multiple perspectives, conclusion
Diagram selection and drawing — choosing the appropriate diagram for the article's content; drawing and annotating it correctly with specific labels and shifts
Key concepts — scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence, intervention, markets — must be explicitly linked in at least one commentary
Development economics — measuring development (GDP, GNI per capita, HDI, HPI), factors constraining development, strategies (trade vs aid, import substitution, export-led growth, IMF and World Bank)
Globalisation — benefits and costs, impact on income distribution, multinational corporations, financial globalisation, global commons

ASSESSMENT

Assessment Structure

We support both Internal Assessment (IA) and final exams with a structured plan, feedback cycles, and timed practice. SL and HL requirements are clearly differentiated.

Paper 1

Extended Response — Micro & Macro

SL: 75 mins, 30% — extended response; two questions each with two parts (part a and part b); both parts must be answered; evaluative essay with diagram expected.
HL: 105 mins, 30% — same format; longer time for deeper analysis.

Paper 2

Data Response

SL & HL: 105 mins; SL 40%, HL 30% — data response; two questions based on stimulus material; tests application of theory to real-world data.

Paper 3 (HL only) + IA

Policy Analysis + IA Portfolio

HL only: Paper 3 — 105 mins, 20% — policy analysis questions requiring quantitative (elasticity, multiplier, index numbers) and qualitative analysis.
IA portfolio: three commentaries (max 800 words each), each on a different syllabus section and different article; SL 30%, HL 20%.

EXAM BOARDS

Assessment Framework

IB DP (SL)

IB DP (HL)

Internal Assessment (IA)

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TEACHING APPROACH

Our IB Economics Teaching Approach

01

Diagram Mastery

Diagrams are worth marks in virtually every Economics question. We drill all key diagrams — supply and demand with welfare analysis, externalities with deadweight loss, AD/AS with output gaps, cost curves, market structure diagrams — until students can draw and annotate them perfectly under time pressure with correct labelling and shifts.

02

IA Commentary Coaching

The IA portfolio is worth 20–30% of the final grade and consists of three commentaries that must each use different sections of the syllabus. We coach students through article selection, diagram choice, commentary structure, economic analysis, and evaluation — with detailed written feedback on each draft against the IB criteria.

03

Chain of Reasoning Development

IB Economics mark schemes reward extended chains of economic reasoning — moving from cause through mechanism to effect with theory, diagrams, and real-world context. We develop this skill explicitly in every session rather than relying on students to acquire it naturally.

04

Paper 3 HL Quantitative Preparation

Paper 3 HL includes quantitative questions — elasticity calculations, multiplier calculations, index numbers — that many HL students underprepare for. We ensure all HL students are confident with the required mathematical skills well before the exam.

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