Unit 1 Introduction to economics

1.1 What is economics?

1.2 How do economists approach the world?

Unit 2 Microeconomics

2.1 Demand

2.2 Supply

2.3 Competitive market equilibrium

2.4 Critique of the maximizing behaviour of consumers and producers

2.5 Elasticities of demand

2.6 Elasticity of supply

2.7 Role of government in microeconomics

2.8 Market failure - externalities and common pool or common access resources

2.9 Market failure - public goods

2.10 Market failure - asymmetric information

2.11 Market failure - market power

2.11.1 (HL)—Market structures

2.11.2 (HL)—Rational producer behaviour

2.11.3 (HL)—Degrees of market power

2.11.4 (HL)—Monopoly

2.11.5 (HL)—Oligopoly

2.11.6 (HL)—Monopolistic competition

2.11.7 (HL)—Advantages and risks of market power

2.11.8 (HL)—Government responses to market power

2.12 The market's inability to achieve equity

Unit 3 Macroeconomics

3.1 Measuring economic activity and illustrating its variations

3.2 Variations in economic activity - aggregate demand and aggregate supply

3.3 Macroeconomic objectives

3.4 Economics of inequality and poverty

3.5 Demand management - monetary policy

3.6 Demand management - fiscal policy

3.7 Supply-side policies

Unit 4 The global economy

4.1 Benefits of international trade

4.2 Types of trade protection

4.3 Arguments for and against trade control/protection

4.4 Economic integration

4.5 Exchange rates

4.6 Balance of payments

4.7 Sustainable development

4.8 Measuring development

4.9 Barriers to economic growth and/or economic development

4.10 Economic growth and/or economic development strategies

IB Economics HL 2.11.3 (HL)—Degrees of market power Question Bank

• Market power is the ability of a firm to influence price

• Perfectly competitive firms have no market power and are price takers

• Imperfectly competitive firms have varying degrees of market power and are price makers

• Diagram: perfectly competitive firm as price taker where P = D = AR = MR

• Diagram: perfectly competitive firm showing abnormal profit, normal profit, and losses

• Diagram: perfectly competitive market equilibrium and allocative efficiency where P = MC or MB = MC

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