IB Economics

Nature of the subject

'Economics is a dynamic social science, forming part of group 3—individuals and societies. The study of economics is essentially about dealing with scarcity, resource allocation and the methods and processes by which choices are made in the satisfaction of human wants. As a social science, economics uses scientific methodologies that include quantitative and qualitative elements.

The IB Diploma Programme economics course emphasizes the economic theories of microeconomics, which deal with economic variables affecting individuals, firms and markets, and the economic theories of macroeconomics, which deal with economic variables affecting countries, governments and societies. These economic theories are not to be studied in a vacuum—rather, they are to be applied to real-world issues. Prominent among these issues are fluctuations in economic activity, international trade, economic development and environmental sustainability.

The ethical dimensions involved in the application of economic theories and policies permeate throughout the economics course as students are required to consider and reflect on human end-goals and values.

The economics course encourages students to develop international perspectives, fosters a concern for global issues, and raises students’ awareness of their own responsibilities at a local, national and international level. The course also seeks to develop values and attitudes that will enable students to achieve a degree of personal commitment in trying to resolve these issues, appreciating our shared responsibility as citizens of an increasingly interdependent world.

Distinction between SL and HL

SL and HL students of economics are presented with a common syllabus, with an HL extension in some topics. The syllabus for both SL and HL students requires the development of certain skills and techniques, attributes and knowledge—as described in the assessment objectives of the programme.

While the skills and activity of studying economics are common to both SL and HL students, the HL student is required to acquire a further body of knowledge—including the ability to analyse, synthesize and evaluate that knowledge—and to develop quantitative skills in order to explain and analyse economic relationships. These quantitative skills are specifically assessed at HL in paper 3.'

Syllabus Outline

Assessment Objectives

Command Terms and connection to assessment objectives

Source - IB Economics Syllabus (First Examination 2013 onwards)

What is Economics?

Here are some descriptions you might have heard ...

Economics is all about money and business.

- What most laypeople usually described when they first heard the word "Economics"

The study that deals with the production, distribution, and consumption of goods and services, or the material welfare of human kind. - Online Dictionary

Economics is the study of how society manages its scarce resources. - Mankiw, Principles of Economics

Economics is the study of the choices made by people who are faced with scarcity. - O’Sullivan, Economics Principles and Tools

Economics is the study of human behavior in attempting to use scarce resources to satisfy unlimited wants and needs. - A common definition in many Economics textbooks

Nowadays, modern Economics is redefined as an axiomatic science of observable behaviour. In other words, Economics is a science resting on the hypothesize of selfishness/maximizing self-interest to explain human behavior.

What is science?

Belief: Events do not happen accidentally, but follow some universal rules & patterns (if conditions are duplicated, so too will be the outcome).
Aim: To establish these universal rules so that we are able to explain & to predict the occurrence of similar events in the future.

Is Economics a science subject?

Economics is a social science! Economists adopt a scientific way to explain human behaviour.

Basic unit of study: individual
Belief: An individual makes his own choice & his behavior follow certain rules or some predictable patterns.
Aim: To explain or predict an individual’s choice and the consequent behaviour.

Interesting videos in the Economics field