Economics

ECONOMICS 

Higher level and Standard Level

Nature of the subject 

At the heart of economics 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 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?  

Students are also expected to examine the ways in which economic activity impacts the environment, and consider the challenges facing the world in terms of fair access to resources, goods and services.  

The economics course promotes international-mindedness. Through nine key concepts (scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence and intervention), students of the economics course will develop the knowledge, skills, values and attitudes that will encourage them to act responsibly as global citizens. 

Distinction between Standard Level (SL) and Higher Level (HL)

The HL course in economics differs from the SL course in economics in terms of the:

• recommended hours devoted to teaching (240 hours for HL compared to 150 hours for SL)

• extra depth and breadth required (extension material for HL only)

• nature of the examination questions. Both SL and HL students develop quantitative skills, but HL students will need to further develop these as appropriate, in analysing and evaluating economic relationships in order to provide informed policy advice. These skills are specifically assessed in HL paper 3.

Assessment components (Standard level)  

External assessment (3 hours)  / 70 %  

Paper 1 (1 hour and 15 minutes)  /30 %

An extended response paper (25 marks)  

Assessment objectives: AO1, AO2, AO3, AO4  

Syllabus content (excluding HL extension material)  

Students answer one question from a choice of three. (25 marks)  

Paper 2 (1 hour and 45 minutes)  /40 %

A data response paper (40 marks)  

Assessment objectives: AO1, AO2, AO3, AO4  

Syllabus content (excluding HL extension material). Includes some quantitative questions.  

Students answer one question from a choice of two. (40 marks)  

Internal assessment (20 teaching hours)  / 30 %  

This component is internally assessed by the teacher and externally moderated by the IB at the end of the course.  

Students produce a portfolio of three commentaries, based on different units of the syllabus (excluding the introductory unit) and on published extracts from the news media.  Each of the three commentaries should use a different key concept as a lens through which to analyse the published extracts.  

Maximum 800 words for each commentary (45 marks)  

Assessment components (Higher level)  

External assessment (4 hours 45 minutes)  / 80 %  

Paper 1 (1 hour and 15 minutes)  /20 %

An extended response paper (25 marks)  

Assessment objectives: AO1, AO2, AO3, AO4  

Syllabus content including HL extension material.

Students answer one question from a choice of three. (25 marks)  

Paper 2 (1 hour and 45 minutes)  /30 %

A data response paper (40 marks)  

Assessment objectives: AO1, AO2, AO3, AO4  

Syllabus content including HL extension material. Includes some quantitative questions.

Students answer one question from a choice of two. (40 marks)  

Paper 3 (1 hour and 45 minutes)

A policy paper (60 marks)

Assessment objectives: AO1, AO2, AO3, AO4

Syllabus content including HL extension material. Includes both quantitative and qualitative questions.

Students answer two compulsory questions. (30 marks per question)

Internal assessment (20 teaching hours) / 20 %

This component is internally assessed by the teacher and externally moderated by the IB at the end of the course.

Students produce a portfolio of three commentaries, based on different units of the syllabus (excluding the introductory unit) and on published extracts from the news media. Each of the three commentaries should use a different key concept as a lens through which to analyse the published extracts.

Maximum 800 words for each commentary (45 marks) 

Economics and TOK  

There is a variety of ways to gain knowledge in economics. For example, data and evidence collection, experimentation, observation, inductive and deductive reasoning, can all be used to help explain patterns of behaviour and lead to knowledge claims. Students in individual and societies subjects are required to evaluate the resulting knowledge claims by exploring questions concerning their validity, reliability, credibility and certainty, as well as individual and cultural perspectives on them.  

During the economics course, a number of questions will arise that highlight the relationships between TOK and economics:  

• Are there fundamental differences between economics and other disciplines or areas of knowledge? If so, are these differences more than just methodological differences?  

•  How have technological advances affected the nature and practices of economics?  

•  Do emotion and intuition have a role in economics?  

• What factors affect the reliability and validity of economic models?  

• What is the difference between deductive and inductive reasoning? Is economics based on deductive or inductive reasoning or both?  

• Does the inability of economics to perform controlled experiments mean that economics cannot be scientific in its approach to understanding the world?  

• What are the implications of accepting that knowledge in economics changes over time?