Ib Economics Hl Formula Booklet

The Microeconomics section of the booklet is the most calculation-dense. It governs how markets function and how agents (consumers and firms) respond to price signals.

The booklet provides the standard formula: $$ PED = \frac%\ change\ in\ quantity\ demanded%\ change\ in\ price $$

HL Specific Twist: HL students must calculate PED using the midpoint (arc) formula to avoid directional bias. While the booklet gives you the standard formula, you must remember the expanded version: $$ PED = \frac(Q2 - Q1) / (Q2 + Q1)(P2 - P1) / (P2 + P1) \times 100 $$ Pro tip: The booklet provides the "change over average" method. Use it for perfect scores on calculation questions. ib economics hl formula booklet

Example: If potential GDP is $1,000B, actual is $800B, and the multiplier is 4.

Without the formula booklet, students confuse dividing vs. multiplying. The booklet keeps you logical. The Microeconomics section of the booklet is the

Do your first revision session with the booklet closed. Force your brain to recall. Then, do a timed past paper (Paper 3) with the booklet open. Time yourself strictly (45 minutes for Paper 3). The goal is not memory; it's navigation speed.

| Concept | Formula | |---------|---------| | Terms of trade | (Export price index / Import price index) × 100 | | Real exchange rate | Nominal exchange rate × (Domestic price / Foreign price) | | Tariff revenue | Tariff per unit × Import quantity after tariff | Without the formula booklet, students confuse dividing vs

Formulas:

Deep Dive & Exam Logic:

Profit Maximization: The golden rule is $MC = MR$.

Shut Down Point (HL): A firm should shut down in the short run if $TR < TVC$ (or if $P < AVC$). This is a vital evaluation point for loss-making firms.

The multiplier formula uses marginal propensities (MPC, MPS). Students often plug in average propensities (APC, APS). Solution: The examiner will give you data like "When income rises from $100 to $200, consumption rises from $80 to $150." Calculate MPC = $\Delta C / \Delta Y = 70/100 = 0.7$. Do not use $80/100 = 0.8$.

If you are in the first cohort of the new syllabus (first exams 2025), note the following changes to the formula booklet: