Table Of ContentEconomics
for the 18 DIPLOMA
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REVISION GUIDE
Economics
for the IB DIPLOMA
Paul Hoang
'1
~D~~A~I~~
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© Paul Hoang 2014
First published in 2014 by
Hodder Education
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Impression number 5 4 3 2 l
Year 2016 2015 2014
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ISBN:978-14718-0718-J
Contents
How to use this revision guide vii
Getting to know the exam viii
Assessment objectives and command terms x
Countdown to the exams xii
Section 1 Microeconomics
Section 2 Macroeconomics 58
Section 3 International economics 111
Section 4 Development economics 143
Are you ready? 170
My revision notes 175
Glossary 178
Dedications
This book is dedicated to Mr Graham Hollamby, my economics teacher at Southwark
College, London.
My heartfelt thanks and love to Kin, Jake and Luke for always putting up with me.
My sincere thanks to my publisher (and fellow Arsenal fan), So-Shan Au, for her help
and guidance throughout this project.
Finally, my gratitude to Samson Wong, an outstanding student who provided invaluable
feedback from the perspective of an 1B learner.
Acknowledgements
The Publishers would like to thank the following for permission to reproduce copyright
material:
Photos:
p. 86 © Tsvangirayi Mukwazhi/AP/Press Association Images.
Text:
p. 150: Figure 4.2, redrawn from http://en.wikipedia.org,/wiki/List-of-countries-by
Human-Development-lndex
Every effort has been made to trace all copyright holders, but if any have been
inadvertently overlooked the Publishers will be pleased to make the necessary
arrangements at the first opportunity.
How to use this revision guide
Welcome to the Economics for the 1B Diploma Revision Guide. TI1is OOOk will
help you plan your revision and work through it in a methodological way. It
follows the Economics syllabus topic by topic, with revision and exam practice
questions to help you check your understanding.
Features to help you succeed
Expert tips Common mistakes Keyword definitions
These tips give advice that will help These identify typical mistakes that Definitions are provided on the
you boost your final grade. students make and explain how you pages where the essential key
can avoid them. terms appear. These keywords are
those that you can be expected
to define in exams. A glossary of
other essential terms, highlighted
throughout the text, is given at the
Some parts of the course require you to carry out mathematical calculations, end of the book.
plot graphs, and so on. These examples show you how.
EXAM PRACTICE
Exam practice is given for the type of questions you might get. For the longer
essay questions, sample sentences and paragraphs are given to show what
examiners are looking for in your essay answers. For easy reference, the exam
paper is indicated for each question. Use these questions to consolidate your
revision and to practise your exam skills.
EXAM PRACTICE (HL ONLY)
Some parts of the Economics course require you to carry out mathematical
calculations, plot graphs and so on. There are sample Paper 3 exam questions
interspersed in the chapters, with suggested answers online.
You can keep track of your revision by ticking off each topic heading in the
book. There is also a checklist at the end of the lxlok. Use this checklist to
record progres.s as you revise. Tick each box when you have:
• revised and understO<X:! a topic
• used the Exam practice questions and gone online to check your answers.
Use this book as the cornerstone of your revision. Don't hesitate to write in it
and personalise your notes. Use a highlighter to identify areas that need further
work. You may find it helpful to add your own notes as you work through each
topic. Good luck!
viii Economics for the 18 Diploma
Getting to know the exam
Exam paper Duration Format Topics Total marks
Paper 1 1.5 hours Essay 1 and 2 50
Paper 2 1.5 hours Data response 3 and 4 40
Paper 3 {HL only) 1 hour Structured questions All 50
At the end of your Economic.s course you will sit two papers -Paper I and
Paper 2. Paper I is worth 30% of the final marks and Paper 2, 50% of the final
marks. The other assessed part of the course (20%) is made up of the Internal
Assessment, which is marked by your teacher.
HL students will sit an additional paper -Paper 3, worth 20%. For HL
students, Paper I is worth 30% of the final marks, and Paper 2 also 30% of
the final marks. The other assessed part of the course (20%) is the Internal
Assessment (or IA) which is marked by your teacher.
Here is some general advice for the exams:
• Make sure you have learned the command terms (e.g. evaluate, explain,
outline). There is a tendency to focus on the content in a question rather
than the command term, but if you do not address what the command term
is asking of you then you will not be awarded marks. (Command terms are
covered on page x.)
• If you run out of rCXJm on the page, use continuation sheets and indicate
clearly that you have done this on the cover sheet.
• The fact that the question continues on another sheet of paper needs to be
clearly indicated in the text box provided.
• Plan your time carefully before the exams.
Paper 1
Paper I ( 1.5 hours) contains two sections: Section A is based on
Microeconomic.sand Section Bis based on Macroeconomics. You will need to
answer one of the two questions from each section. Part a) of each essay is worth
10 marks and part b) is worth 15 marks. Hence, the total number of marks for
this paper is 50.
• It is necessary to include definitions in the essays, so make sure you have
learned the keyword definitions in this book.
• As the paper is only out of 50 marks, the questions cannot cover all aspects
of Microeconomics and Macroeconomics. It is therefore essential that you
thoroughly revise the whole of Topics I and 2 of the syllabus so that you can
tackle any questions that come up.
• The 10-mark questions do not involve any evaluation, but do require a
concluding statement that answers the question. The 15-mark questions do
require an evaluation.
• Wherever appropriate, include fully labelled diagrams and the application of
real-\vorld examples to substantiate your answers.
How to use this revision guide ix
Paper 2
Paper 2 ( 1.5 hours) contains two sections: Section A contains two data-response
questions on International economics; you must answer one of these, which is
worth a total of 20 marks. In Section B you must answer one of the two data
response questions on Development economics, again \Vorth 20 marks. The
total maria for the paper is therefore 40.
In Paper 2 you may be given a range of data in various fonns (e.g. diagrams,
graphs, charts and data tables) relating to a specific case study on lntcmational
economics and Development economics. Questions will test your knowledge of
Topic 3 and Topic 4 of the syllabus, and your ability to apply this to the given
case studies.
• Do not spend tco much time on one of the two sections.
• Plan your time carefully (do this before the exam!). You should spend no
more than 45 minutes on each section.
• By practising past exam papers, you will be able to fine-tune your time
management; this may vary from student to student.
• Choose your questions carefully. Lcok at all sections of the data-response
questions before making your choices.
• You will be required to provide definitions (for the 2-mark questions) and to
draw relevant diagrams (for the 4-mark questions). Practise drawing accurate
and fully labelled diagrams.
• Some students write far too much for questions worth only 2 marks, and
then run out of time later on for the 8-mark question. Look carefully at the
number of marks available for each question and adjust the amount of time
you spend on that question accordingly.
• There are several parts to each data-response question -make sure you
ans\ver all parts.
• Case studies help answer Paper 2 data-response questions -make sure you
read the stimulus material and analyse the supplementary data as you will be
expected to apply your knowledge.
