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Economics

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

What Assumptions Underlie Rational Consumer Choice Theory?

Learn the assumptions behind rational consumer choice theory and how behavioural economics challenges them in IB Economics HL subtopic 2.4.

2.5 Elasticities of Demand

Why Is PED for Primary Commodities Usually Lower Than for Manufactured Goods? (HL)

Learn why primary commodities usually have lower price elasticity of demand than manufactured goods, with determinants, examples, and IB exam advice.

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2.5 Elasticities of Demand

How Is PED Related to Total Revenue?

Learn how PED determines whether a price change raises, lowers, or leaves total revenue unchanged, with an IB Economics example and clear IB exam advice.

2.5 Elasticities of Demand

What Is Income Elasticity of Demand (YED) and How Do You Calculate It?

Learn what income elasticity of demand measures, how to calculate YED, and how to interpret positive, negative, elastic and inelastic results.

2.5 Elasticities of Demand

What's the Difference Between a Normal Good and an Inferior Good Based on YED?

Learn how the sign of income elasticity of demand distinguishes normal goods from inferior goods, with calculations and IB Economics exam guidance.

2.6 Elasticity of Supply

What Is Price Elasticity of Supply (PES) and How Do You Calculate It?

Learn what price elasticity of supply measures, how to calculate and interpret PES, and how to show correct working in IB Economics exam responses.

2.5 Elasticities of Demand

Why Does YED Matter for Firms and for a Country's Economic Structure? (HL)

Learn how income elasticity of demand helps firms forecast sales, plan output and explain structural change as economies grow in IB Economics HL exams.

2.7 Role of Government in Microeconomics

Why Do Governments Intervene in Markets?

Learn why governments intervene in markets to correct market failure, promote equity, raise revenue, and influence production and consumption in IB Economics.

2.6 Elasticity of Supply

What Determines PES (Time; Mobility of Factors; Ability to Store)?

Learn how time, factor mobility, storage, spare capacity and rising costs determine price elasticity of supply in IB Economics exam responses.

2.6 Elasticity of Supply

Why Is PES for Primary Commodities Usually Lower Than for Manufactured Goods? (HL)

Learn why primary commodities usually have lower PES than manufactured goods through IB Economics determinants, examples, time periods, and HL exam technique.

2.7 Role of Government in Microeconomics

How Do Indirect Taxes and Subsidies Affect a Market?

Learn how indirect taxes and subsidies shift supply, change market equilibrium, affect stakeholders, and should be explained in IB Economics exams.

2.7 Role of Government in Microeconomics

What's the Difference Between a Price Ceiling and a Price Floor?

Learn how price ceilings and price floors differ, when they bind, and why they create shortages or surpluses, with IB Economics exam guidance.

2.7 Role of Government in Microeconomics

What Is Direct Government Provision of Services?

Learn how direct government provision works, why governments provide services, its benefits and limitations, and how to explain it in IB Economics exams.

2.7 Role of Government in Microeconomics

What Is Command and Control Regulation?

Learn how command and control regulation uses legal rules to influence markets, correct market failure, and affect stakeholders in IB Economics.

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

What Is a Negative Externality of Production or Consumption?

Understand how negative production and consumption externalities cause market failure, over-allocation and welfare loss in IB Economics exam diagrams.

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

What Is the Socially Optimal Output (MSB = MSC)?

Learn why socially optimal output occurs where marginal social benefit equals marginal social cost, and how externalities cause market failure.

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

What Is a Carbon Tax?

Learn how a carbon tax corrects negative production externalities, shifts supply, reduces emissions, and should be evaluated in IB Economics exams.

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

What Are Tradable Permits?

Learn how tradable permits use a pollution cap and market trading to reduce negative externalities, including their strengths, limits, and exam use.

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

What Are Common Pool Resources and the “Tragedy of the Commons”?

Learn why common pool resources are rivalrous but non-excludable, how overuse creates market failure, and how IB Economics evaluates solutions for exams.

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

What Is a Pigouvian (Indirect) Tax?

Learn how a Pigouvian indirect tax internalizes negative externalities, shifts supply, reduces overproduction, and improves allocative efficiency.

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

How Do You Calculate Welfare Loss From a Diagram? (HL)

Learn how to calculate welfare loss from an externality diagram using the triangle formula, correct values, units, and IB Economics exam technique.

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

How Does Government Legislation and Education Correct Externalities?

Learn how legislation and education correct externalities by changing production, consumption and incentives, with IB Economics guidance for exam success.

2.10 Market Failure - Asymmetric Information (HL Only)

What Is Moral Hazard?

Learn how moral hazard arises from asymmetric information after an agreement, with insurance and banking examples for IB Economics HL exam preparation.

2.10 Market Failure - Asymmetric Information (HL Only)

How Do Signalling and Screening Address Asymmetric Information?

Learn how signalling and screening reduce asymmetric information, adverse selection, and market failure in IB Economics HL, with exam examples.

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