IB Economics - Study Hub

Your complete study hub for IB Economics. Free notes, flashcards, and AI-powered practice for every topic.

What is IB Economics?

IB Economics is a Group 3 subject that explores how individuals, firms, and governments make decisions about scarce resources. Students study microeconomics, macroeconomics, international trade, and development economics using real-world examples and data interpretation.

The course is available at both Standard Level and Higher Level. HL students also cover additional quantitative techniques and sit an extra Paper 3.

Subject Group

Group 3 (Individuals & Societies)

Available Levels

SL and HL

Teaching Hours

150 (SL) / 240 (HL)

Exam Papers

Paper 1 · Paper 2 · Paper 3 (HL) · IA

IB Economics Assessment

Paper 1 - Extended Response

SL 30% / HL 20%1 h 15 min

Two-part extended-response questions testing economic theory, application, and evaluation.

Paper 2 - Data Response

SL 40% / HL 30%1 h 45 min

Case-study and data-response questions requiring analysis of real-world economic material.

Paper 3 - HL Only

HL 30%1 h 45 min

Two compulsory questions combining calculations with qualitative analysis.

Internal Assessment

SL 30% / HL 20%

A portfolio of three commentaries applying economic theory to real news articles.

IB Economics Syllabus - All Units and Topics

Unit 1: Introduction to economics

1.1What is economics?4 sub-topics

1.1.1 Scarcity and choice 1.1.2 Opportunity cost and trade-offs 1.1.3 Free goods vs economic goods 1.1.4 The three basic economic questions

1.2How do economists approach the world?3 sub-topics

1.2.1 Economic models and assumptions 1.2.2 Positive and normative economics 1.2.3 Limitations of economic models

Unit 2: Microeconomics

2.1Demand3 sub-topics

2.1.1 The law of demand 2.1.2 Determinants of demand 2.1.3 Movements vs shifts of demand

2.2Supply3 sub-topics

2.2.1 The law of supply 2.2.2 Determinants of supply 2.2.3 Movements vs shifts of supply

2.3Competitive market equilibrium3 sub-topics

2.3.1 Market equilibrium 2.3.2 Changes in equilibrium 2.3.3 Consumer and producer surplus

2.4Critique of maximizing behaviour of consumers and producers6 sub-topics

2.4.1 The rational consumer and producer model 2.4.2 Behavioural economics and biases 2.4.3 Nudge theory and choice architecture 2.4.4 Costs and revenue basics 2.4.5 Economies and diseconomies of scale 2.4.6 Profit maximisation logic

2.5Elasticity of demand3 sub-topics

2.5.1 Price elasticity of demand (PED)2.5.2 PED and total revenue 2.5.3 Income and cross-price elasticity

2.6Elasticity of supply2 sub-topics

2.6.1 Price elasticity of supply (PES)2.6.2 Determinants of PES

2.7Role of government in microeconomics3 sub-topics

2.7.1 Price controls 2.7.2 Indirect taxes 2.7.3 Subsidies

2.8Market failure: externalities and common pool resources3 sub-topics

2.8.1 Negative externalities 2.8.2 Positive externalities 2.8.3 Common pool resources

2.9Market failure: public goods2 sub-topics

2.9.1 Characteristics of public goods 2.9.2 Government provision and quasi-public goods

2.10Market failure: asymmetric information2 sub-topics

2.10.1 Asymmetric information and market failure 2.10.2 Solutions to asymmetric information

2.11Market failure: market power2 sub-topics

2.11.1 What is market power?2.11.2 Consequences and policy responses

2.12The market’s inability to achieve equity2 sub-topics

2.12.1 Equity, equality, and measuring inequality 2.12.2 Causes of inequality and redistribution

Unit 3: Macroeconomics

3.1Measuring economic activity and illustrating its variations3 sub-topics

3.1.1 What is GDP and how is it measured?3.1.2 Real vs nominal GDP and comparisons 3.1.3 The business cycle

3.2Variations in economic activity: aggregate demand and aggregate supply3 sub-topics

3.2.1 Aggregate demand 3.2.2 Aggregate supply 3.2.3 Equilibrium and macroeconomic shocks

3.3Macroeconomic objectives3 sub-topics

3.3.1 Economic growth and unemployment 3.3.2 Inflation and deflation 3.3.3 Conflicts between macro objectives

3.4Economics of inequality and poverty2 sub-topics

3.4.1 Measuring inequality and poverty 3.4.2 Causes, consequences, and policy responses

3.5Demand management: monetary policy3 sub-topics

3.5.1 Central banks and interest rates 3.5.2 The transmission mechanism 3.5.3 Evaluation and limitations

3.6Demand management: fiscal policy3 sub-topics

3.6.1 Government spending and taxation 3.6.2 The multiplier effect 3.6.3 Budget balance, debt, and limitations

3.7Supply-side policies3 sub-topics

3.7.1 Market-based supply-side policies 3.7.2 Interventionist supply-side policies 3.7.3 Evaluation of supply-side policies

Unit 4: The global economy

4.1Benefits of international trade2 sub-topics

4.1.1 Absolute and comparative advantage 4.1.2 Free trade benefits and the terms of trade

4.2Types of trade protection3 sub-topics

4.2.1 Tariffs 4.2.2 Quotas and subsidies 4.2.3 Administrative barriers and other forms of protection

4.3Arguments for and against trade control/protection2 sub-topics

4.3.1 Arguments for trade protection 4.3.2 Arguments against trade protection

4.4Economic integration2 sub-topics

4.4.1 Types of trading blocs 4.4.2 Trade creation, trade diversion, and evaluation

4.5Exchange rates3 sub-topics

4.5.1 Floating exchange rates 4.5.2 Fixed and managed exchange rates 4.5.3 Consequences of exchange rate changes

4.6Balance of payments2 sub-topics

4.6.1 Components of the balance of payments 4.6.2 Current account imbalances and corrective policies

4.7Sustainable development2 sub-topics

4.7.1 Economic growth vs sustainable development 4.7.2 Policies for sustainable development

4.8Measuring development2 sub-topics

4.8.1 Single indicators of development 4.8.2 Composite indicators and the HDI

4.9Barriers to economic growth and/or economic development2 sub-topics

4.9.1 Economic and institutional barriers 4.9.2 International and social barriers

4.10Economic growth and/or economic development strategies3 sub-topics

4.10.1 Trade strategies and market-based approaches 4.10.2 Interventionist strategies and foreign aid 4.10.3 Evaluating development strategies

Free IB Economics Study Resources

Study Notes

Topic-by-topic notes for every unit

Flashcards

Spaced-repetition flashcards

Question Bank

Practice by topic and command term

Exam Skills

Paper strategies and mark schemes

Command Terms

IB command term definitions

Frequently Asked Questions about IB Economics

Is IB Economics hard?

IB Economics is moderate in difficulty. The concepts are intuitive, but top grades require precise terminology, accurate diagrams, and strong evaluation.

How do I get a 7 in IB Economics?

Master all four units, practise drawing and explaining diagrams, structure 10 and 15 mark answers carefully, and use real-world examples consistently.

Should I take IB Economics SL or HL?

Choose HL if you plan to study economics, business, or finance at university. HL adds extra quantitative content and Paper 3.

How many units are in IB Economics?

The course has four units: Introduction to Economics, Microeconomics, Macroeconomics, and The Global Economy.

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