Economics (SL/HL)

Economics is an exciting, dynamic subject that allows students to develop an understanding of the complexities and interdependence of economic activities in a rapidly changing world.

At the heart of economic theory is the problem of scarcity. While the world’s population has unlimited needs and wants, there are limited resources to satisfy these needs and wants. As a result of this scarcity, choices have to be made. The economics course, at both SL and HL, uses economic theories to examine the ways in which these choices are made:

• at the level of producers and consumers in individual markets (microeconomics)

• at the level of the government and the national economy (macroeconomics)

• at an international level where countries are becoming increasingly interdependent through international trade and the movement of labour and capital (the global economy).

The choices made by economic agents (consumers, producers and governments) generate positive and negative outcomes and these outcomes affect the relative well-being of individuals and societies. As a social science, economics examines these choices through the use of models and theories. The Diploma Programme (DP) economics course allows students to explore these models and theories, and apply them, using empirical data, through the examination of the following six real-world issues which are posed as economic questions:

• How do consumers and producers make choices in trying to meet their economic objectives?

• When are markets unable to satisfy important economic objectives—and does government intervention help?

• Why does economic activity vary over time and why does this matter?

• How do governments manage their economy and how effective are their policies?

• Who are the winners and losers of the integration of the world’s economies?

• Why is economic development uneven?