IB Economics — Microeconomics and Macroeconomics flashcards
10 of 79 cards free to study here · 3 topics · the whole deck is built into Willys
The nine key concepts, demand and supply, HL behavioural economics, elasticities, intervention and market failure, HL market calculations, HL asymmetric information and market power, AD–AS in both schools, macro objectives, inequality and policy.
Learn deck · part of IB Economics · written against: IB Diploma Programme IB Economics current subject guide; SL and HL in one deck, HL-only cards under subtopic tags starting HL. Updated 2026-10-10.
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Which nine key concepts run through the IB Economics course?Scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence and intervention. In the internal assessment, every one of the three commentaries is analysed through a different one of these concepts.Introduction to Economics
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How does equity differ from equality in economics?Equity means fairness, which can justify unequal treatment (higher tax rates on higher incomes); equality means identical shares. A perfectly equal income distribution is not automatically an equitable one.Introduction to Economics
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What does the concept of economic well-being cover beyond a person's income?Economic well-being covers prosperity, economic security and quality of life: income and wealth, but also job security, access to health care and education, and the ability to meet basic needs.Introduction to Economics
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What does ceteris paribus mean, and why do economic models depend on it?'Other things being equal': a model changes one variable at a time while holding the others constant, so its effect can be isolated. Real data rarely hold everything else constant, which limits a model's predictions.Introduction to Economics
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Which three functions does the price mechanism perform in allocating resources?Prices signal where resources are wanted, give producers an incentive to supply more when the price rises, and ration scarce goods to those willing and able to pay.Microeconomics › Demand and Supply
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Beef and leather are in joint supply. How does a rise in demand for beef affect the leather market?More cattle are slaughtered, so the supply of hides rises: the leather supply curve shifts right, its price falls and the quantity traded rises.Microeconomics › Demand and Supply
Why: joint-supply goods are produced together from the same process. -
What is bounded rationality?The idea that people try to choose rationally but are limited by information, time and cognitive ability, so they settle for satisfactory choices (satisficing) rather than the utility-maximising one.Microeconomics › HL Behavioural Economics
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How does gross national income (GNI) differ from GDP?GNI = GDP plus income residents earn from abroad minus income paid to foreign owners of factors in the country. It can be well below GDP in an economy with large foreign-owned investment.Macroeconomics › Measuring Economic Activity
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Why are countries' GDP per capita figures converted at purchasing power parity (PPP) rather than at market exchange rates?PPP adjusts for differences in price levels, so a given income buys a comparable basket in each country. Market exchange rates ignore the lower cost of non-traded goods in poorer economies and fluctuate with capital flows.Macroeconomics › Measuring Economic Activity
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Why should the output, income and expenditure methods of measuring national income give the same total?Every unit of spending on final output is someone's income, and it equals the value of what was produced, so the three are different views of one circular flow (differences in practice are statistical discrepancies).Macroeconomics › Measuring Economic Activity
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About these cards
Review status: Second-reader reviewed, with corrections applied.
Checked against:
- OpenStax Principles of Economics 3e, consulted as a reference; no text copied.
- IB Diploma Programme subject guide (topic outline only; no text copied): Economics guide for first assessment 2024 (published February 2020, updated October 2022).
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