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 2.11.6 (HL)—Monopolistic competition Question Bank

• Monopolistically competitive firms maximize profit in the short run and long run

• Many substitutes make demand more elastic than monopoly demand

• Monopolistic competition is allocatively inefficient but offers more product variety and less inefficiency than monopoly

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

• Diagram: monopolistic competition with more elastic demand than monopoly

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