The commentaries and final examinations for IB economics require you to really only do 3 things – define, analyse with the help of diagrams, and evaluate. As well, the new HL paper 3 asks students to perform some quantitative tasks but these seem to be fairly straightforward. At the bottom of this page you will find some model answers to IB and IB-style questions.
Definitions are required for both papers one and two and in your commentaries. In paper 1, usually the ‘a’ part of the essay question will require you to define terms. The data response questions in paper 2 also require definitions in part ‘a’.
Definitions are straightforward to learn, but they must be learned. The tricky thing about definitions in economics is that while the words are often familiar to us their economic definitions are usually somewhat different (and usually more precise) than their everyday meaning. For instance, while we all know what ‘scarcity’ means in everyday language, in economics the definition (the situation where wants exceed resources) is quite different. Even more befuddling, sometimes a term in economics has different meanings depending on the section being studied. For instance, the term ‘quota’ is used both when looking at supply-management schemes designed to keep the prices of commodities like milk and eggs stable and when studying protectionist measures designed to keep out imports.
To learn the correct definitions, it is important to have a good source. Some books are better than others, but with my own students I used the definitions from the markschemes for past IB papers. If you ask your teacher to look on the Online Curriculum Centre operated for IB teachers, they should be able to find a glossary made up of definitions taken from past papers.
Analysis with the aid of diagrams is a core skill in economics and is at the heart of paper 2 and your commentaries. To succeed, you first need to understand and be able to reproduce accurately the diagrams from the course. Again, there is no short-cut here – you will need to practice drawing the diagrams and you should do so while telling yourself why each line appears as it does.
Once you know the diagrams, though, it is a fairly easy thing to do well on the ‘b’ and ‘c’ parts of the data response questions in paper 2. First, you need to explain, in words, precisely what is going on in the situation that is being analyzed. Be sure to explain pretty fully – for instance, if the situation is one where demand rose, it is always a good idea to go on to explain why that was the case in a way that shows that you understand why the event would lead to an increase in demand. Next, having explained the situation, show the situation using a diagram. Be sure to fully label the diagrams and show the different equilibrium price and quantity points with dotted lines to the axes. Lastly, explain the diagram, making sure to make specific reference to the points and lines that you have drawn. To sum up, you need to explain, then show, and then explain what you have shown.
Evaluation is the last big skill that is required in both papers one and two and in your commentaries. Generally, part ‘b’ of the essay questions in paper 1 is an evaluation question, as are the ‘d’ parts of the data response questions in paper 2. Evaluation is really pretty simple as it is just making a judgement. Most commonly, you are asked to evaluate a policy response. To do so, you should judge whether it will be effective or not in achieving its objective. You should then judge whether this response is what theory suggests should be done. Lastly, you should look at the impact of the policy on various groups that are affected, for instance, consumers, workers, firms and the government, in the short and the long run. Then, taking all of this together, you should try to figure out whether, overall, the policy is a good one or a bad one.
To take an absurd example, let’s evaluate Robert Mugabe’s decision to print more Zimbabwe dollars to try to tame the hyperinflation that was taking place there a few years ago. Clearly, this is unlikely to be effective in reducing inflation. It is also completely counter to what theory suggests should be done. Looking at the effects of such a policy, it harms consumers, workers and firms in the long run as people stop accepting $Z and the economy turns to barter (and US dollars), even though for some people (for instance, firms with large stockpiles of goods) the inflation may be beneficial in the short run. Overall, then, this can be clearly seen to be a poor policy response to the problem of inflation.
You may also be asked to evaluate the impact of an event (such as an increase in oil prices) which requires you to look only at the impact on the groups affected in the short and long term and then, at the end, judge whether overall the impact will be positive or negative.
Please look at the sample questions and answers below to give you further insight into how to define, analyse and evaluate effectively.
New Material Posted in January 2015
Material Posted in 2011/2012
Workbook for the New I.B. Economics by Bryce McBride is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.