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1.1 What Is Economics?

1.2 How Do Economists Approach the World?

2.1 Demand

2.2 Supply

2.3 Competitive Market Equilibrium

2.4 Critique of the Maximizing Behaviour of Consumers and Producers (HL Only)

2.5 Elasticities of Demand

2.6 Elasticity of Supply

2.7 Role of Government in Microeconomics

2.8 Market Failure - Externalities, Common Pool Resources, Public Goods, Asymmetric Information

2.9 Market Failure - Public Goods

2.10 Market Failure - Asymmetric Information (HL Only)

2.11 Market Failure - Market Power (HL Only)

2.12 The Market’s Inability to Achieve Equity (HL Only)

3.1 Measuring Economic Activities

3.2 Variations in Economic Activity - Aggregate Demand and Aggregate Supply

3.3 Macroeconomic Objectives

3.4 Economics of Inequality and Poverty

3.5 Demand Management - Monetary Policy

3.6 Demand Management - Fiscal Policy

3.7 Supply Side Policies

4.1 Benefits of International Trade

4.2 Types of Trade Protection

4.3 Arguments For and Against Trade Protection

4.4 Economic Integration

4.5 Exchange Rates

4.6 Balance of Payments

4.7 Sustainable Development

4.8 Measuring Development

4.9 Barriers to Economic Growth and Economic Development

4.10 Economic Growth and Economic Development Strategies

IB Economics 2.3.6 Allocative Efficiency at the Competitive Market Equilibrium Key Definitions

Definition

Allocative Efficiency

State of the economy in which the combination and quantity of goods and services produced is aligned with the preferences of consumers and producers, maximising social surplus.

Definition

Marginal Benefit

The benefit gained from consuming an additional unit of a good or service

Definition

Marginal Cost

The cost of producing an additional unit of output

Definition

Social surplus

The sum of consumer surplus and producer surplus. Maximised in the free market, when the market operates at its equilibrium point.

Definition

Welfare loss

The reduction in social surplus that occurs when marginal social benefits (MSB) are not equal to marginal social costs (MSC), typically as a result of market failure.

IB Economics 2.3.6 Allocative Efficiency at the Competitive Market Equilibrium Key Definitions

Definition

Allocative Efficiency

State of the economy in which the combination and quantity of goods and services produced is aligned with the preferences of consumers and producers, maximising social surplus.

Definition

Marginal Benefit

The benefit gained from consuming an additional unit of a good or service

Definition

Marginal Cost

The cost of producing an additional unit of output

Definition

Social surplus

The sum of consumer surplus and producer surplus. Maximised in the free market, when the market operates at its equilibrium point.

Definition

Welfare loss

The reduction in social surplus that occurs when marginal social benefits (MSB) are not equal to marginal social costs (MSC), typically as a result of market failure.