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EconDaddy last won the day on September 27 2019

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  1. Hi, I'd go for an explanation of why smoking creates external costs to society (and hence market failure) with a diagram about the negative externality of consumption and then I'd go on to the tax (explain how a tax can solve the problem) together with new diagram: same as the first one, but now with a shift of the MPC upwards (and thus new equil. quantity closer to the socially optimal one). Make sure that you explain both diagrams in detail and that you stay focused on the article. Hope this helps. Thanks, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  2. Given you defined the key economic terms included in the question and explained your diagram (drawing the breaking-even perfectly competitive firm is not a mistake as that is the long-run outcome) and gave some real-workd examples, you should not lose a lot of points even if the explanation is not the best. Btw, loss-making firms in the short-run means that in the long-run firms will start leaving the market (it is not incorrect to say that "firms will be driven out") as it is free to exit. As a result, the market supply falls, raising the market price and as all firms are price-takers, each individual firm will finally sell at the (now higher) market price (where they break-even). So to be honest, it doesn't seam like you really messed it up, but without having your actual answer I cannot tell for sure how many marks you've lost. Keep us updated when it comes out. I'm also happy to look at it once its graded. EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  3. You can also look around on my blog, the link below is a collection of macro articles: https://econdaddy.com/category/macro/ Make sure its no older than a year. Hope this helps too. Thanks, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  4. Hi, This doesn’t sound too good, but here is what you can do: I suggest that for revision you go through the questions of the official IB Economics Guide as there is nothing else they can ask you about in the exams. Have a look at this short video that shows what to look for. As for the IAs, try and go through this website, it includes all you need to know about the commentaries. Also, as for the cover page (see attached): the rules have changed in the past couple of years, and you only need to hand in one portfolio cover page and that’s all (so no need for a cover page for each IA). I’m here to help if you have any questions. Take care, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com 3cse_e.pdf
  5. Hi, I think Vighnesh gave a great answer, but there is a bit more I would add: The question asks you to explain how the price changes happen. When there is an increase in demand (right shift of D), you'd explain that quantity demanded increases at every price, including the original equilibrium price. Thus, at that price now once the D curve shifted right, there is an excess demand (=shortage). When there is a shortage, producers start raising their price as they can earn more profit at higher prices. As P increases (movement up on S curve), due to the law of demand, the quantity demanded falls (this is a movement upwards on the new demand curve). The P will keep increasing until the shortage is cleared at the new (higher) equilibrium price. When there is an increase in supply (right shift of S), you'd explain that quantity supplied increases at every price, including the original equilibrium price. Thus, at that price now once the S curve shifted right, there is an excess supply (=surplus). When there is an excess supply, producers start cutting their price as they need to get rid of the products that nobody was buying from them. As P decreases (movement down on the new S curve), due to the law of demand, the quantity demanded increases (this is a movement downwards demand curve). The P will keep decreasing until the excess supply is cleared at the new (lower) equilibrium price. Also, don't forget to use examples while you're explaining the determinants and how they work. Thanks, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  6. Hi, Check out this official IB website for samples with moderation. Macro IAs are Example 1 for both students. Hope this helps and let me know if you have any questions. All the best, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  7. Hey, I can certainly help, just get back in touch. Also, I'm currently working on a study guide that answers all the official IB syllabus questions - Micro is ready and available. Thanks, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  8. You're correct in that there is a lot of theory and concepts to understand, and indeed, there is a little math too (only at HL though). But examiners (including me) will always look for answers that show how students are able to apply the theory to real life (using specific real-world examples). If you think about it, all the different sciences exist to make us understand the world around us more. Economics is no exception, it tries to understand what drives human interaction, behavior and decision-making so that we can allocate (scarce) recources in a more efficient way. But if the students know only the theory without connecting it to the world, then this knowledge is pretty useless. So all in all, while it is true that it's pretty theory-based, it is not to say that it isn't practical (or that you can get away with only knowing the concepts). Does this answer your question? Let me know if you have more.
  9. Hi, My suggestion is that you look through the IB Economics guide and also read a couple of chapters of an economics textbook to see what you can expect. The guide lists all the questions in the Syllabus content (pp.16-73) that you'll have to know at the exams. As for the results, based on the latest statistical bulletin (May 2017), there is a significant difference in the results only at HL: here, almost 45% of econ students got 6 or 7, while only a bit more than 30% of B&M students got the same results. However, at SL the results are similar. Nevertheless, it's not the statistical bulletin that you need to consider first, but looking at the guide and a textbook. Also, at higher level, it's good if you're familiar with linear functions as many calculations are based on them. I agree with the everyone else that there should not be much to catch-up on as during DP the school has to teach everything you need to know at the exams. Feel free to let me know if you have any questions. Thanks, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  10. Hi, What you're talking about is indeed difficult to visualise an AD/AS diagram shows given average price levels and not inflation rates. However, you can indicate that a 0.5% inflation rate is a concern to the government as it can easily lead to deflation (fall in the APL), and then show deflation in the diagram as opposed to the APL staying relatively the same (or only slightly increasing with stable inflation). Is this clear? Cheers, EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  11. Hi, Here are my answers: Inflation is a persistent increase in the average price level. If your price level has increased, then yes, it can be considered inflation (compared to the previous macroeconomic equilibrium). How to know if there is spare capacity: you look at hard data like real GDP and unemployment in the past years to have an idea about what figures you should see at the potential output of the country. For example, looking at the Swiss unemployment rate of the past 10 years (see pic below), it's pretty obvious that the natural rate of unemployment is somewhere between 3-3.5%, which means that this is the full employment of the country, so their GDP is equal to the full employment output (potential output) when the economy is operating at this unemployment rate. If unemployment goes substantially above this rate, you can assume that there is demand-deficient (cyclical) unemployment, which also indicates that there is spare capacity in the country. Spare capacity refers to the fact that there are unemployed resources (land, labour, capital) which could be put to production to reach the level of output that a country is potentially capable of producing. Also, if you really want to know how to calculate potential GDP, here is the formula (but this is beyond the IB Economics syllabus, so it is not required from IB students to know it): Again, you check it against the data from the past and use the formula above. Any actual output which is below the full employment output means that there is spare capacity. When actual output is not that far from potential output, spare capacity is low. The characteristics of this section is that further boosts in AD will have larger and larger effects on inflation and lower and lower effects on real output. So if the economy is operating close to the full employment output, an increase in AD will have more of an inflationary effect while real GDP will increase less significantly. Wages are sticky downwards because when firms need to cut costs (e.g. because of lower AD in the country, leading to lower revenues of all firms), then one option would be to cut wages. However, wages are determined in employee contracts, and if a firm would decrease the wages of workers, these employees could go to court as the firms would be breaking their agreements. Also, many workers work for the minimum wage, and hence it is not legally allowed to give them less. Furthermore, labour unions could also start large-scale protests if companies would plan to lower wages. So for all these reasons (workers' contracts, minimum wage laws and labour unions), firms find it difficult to cut wages, and easier to cut jobs (i.e. fire workers) - and this is true for all types of firms and market structures. Hence wages tend not to decrease much even if there is a recession, while the unemployment rate increases as workers get fired and companies go bankrput. On the other hand, wages are rarely sticky/inflexible upward, as most workers are happy to accept higher wages. Hope this helps, let me know if you have questions. EconDaddy IB Economics teacher, examiner and tutor www.econdaddy.com
  12. Hi, How you take notes and study from them is completely up to you - every student has a different approach that works for them. So it's your decision, use what helps you most. On the other hand, my experience tells that reproducing the notes (e.g. as you stated, electronically) will help you memorize, plus if you have the notes online, it's harder to loose them. What I'd definitely do is to make sure you have clear definitions of economic terms and that you understand the diagrams with the concepts behind them. What's absolutely essential is to check if your notes cover all the topics of the IB Econ guide (syllabus section). I'm currently producing notes that answer these questions one by one, let me know if you're interested. Hope this helps. Thanks, EconDaddy - IB Economics teacher, examiner and tutor www.econdaddy.com
  13. Hi, it seems suitable, but it all depends on what and how you write in your commentary. Make sure you explain how expansionary fiscal policy works and stay focused on the article, i.e. discuss the implications of "cutting taxes and fees, improving weak links, boosting consumption and improving people's livelihood" and the fact that there is also a reference to supply-side policies when it talks about the support to technological innovation. EconDaddy - IB Economics teacher and tutor www.econdaddy.com
  14. Hi, First, if this is your 1st year in the IB, it means that you've just started it and you're at the beginning of the course. As a teacher and examiner, I have to emphasize that it's absolutely natural that you're struggling with the writing parts, because this is something to be practised a lot over the course until you get confident about what and how to write. I'm not sure what you meant by the 'writing parts' - Paper 1 style essay questions or Paper 3 style short answers (explanations), but have a look at my summary below about how to get essays right in IB econ to maximise your score. What to include in your essay answers: Always start with defining all the economic terms in the questions. Explanation + diagrams: your explanation of the economic concept in question should be so clear that someone without prior economics knowledge should understand most of it. In 99% of the cases there is a relevant diagram that you can draw. If you’re not sure what diagram to show, you’d better not waste time on something that might turn out irrelevant. However, if you know how to draw a relevant diagram, make sure to do the following: Apply correct labelling on all curves AND the axes Make sure you explain what is going on in your diagram(s) Real-life examples: the reason why this is important is that you should be able to show that you understand why all the above mentioned economic theory is useful for us, who live in a real world (and not in simplified economic models). If you are not giving examples, (i.e. if you don’t connect the theory to real-life), then your knowledge of economic concepts is not very useful. That is why it’s essential to give real-life examples. Also, real-life examples should be real → so please avoid making up examples yourself. For part b) questions only: for the 15 mark questions, you should evaluate a topic in question on top of all the above. This means that you need to speak about at least one (and perhaps more) of the following: short-run vs. long-run pros and cons efficiency (welfare loss) effects on different stakeholders Also, I need to point out that it is absolutely essential to understand the concepts as most of what you learn at the beginning is going to be the basis of your future econ studies. If it's not clear in the book, ask your teacher or classmates who get it. I'm currently working on revision notes that answer the official IB econ syllabus questions one by one, let me know if you're interested. Hope this helps, get back to me if you have any questions. EconDaddy - IB Economics teacher, examiner and tutor www.econdaddy.com
  15. Hi, While there is absolutely no way to tell what would come up, there are some topics which are always good to have a good knowledge about as they can possibly come up in all 3 exams. A solid knowledge of elasticity is essential for example, as it can come up in micro as an essay question (paper 1) or in calculations (in paper 3), but also in international (paper 2) just think of the Marshall-Lerner condition. Also, I always suggest that my students study the evaluation of the use of national income statistics, as it can come up as essay questions in paper 1 and 2 (even at development) but also as a 4 point question in paper 3. So, if I were you, I'd go through topics that come up multiple times in the syllabus. DanielEconDaddy - IB Economics teacher and tutorwww.econdaddy.com
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